1097.51a Basic Class II formula price.The "basic Class II formula price" for the month shall be the basic formula price determined pursuant to 1097.51 for the second preceding month plus or minus the amount computed pursuant to paragraphs (a) through (d) of this section:
(a) The gross values per hundredweight of milk used to manufacture cheddar cheese and butter-nonfat dry milk shall be computed,using price data determined pursuant to 1097.20 and yield factors in effect under the Dairy Price Support Program authorized by the Agricultural Act of 1949, as amended, for the first 15 days of the preceding month and, separately, for the first 15 days of the second preceding month as follows:
(1) The gross value of milk used to manufacture cheddar cheese shall be the sum of the following computations:
(i) Multiply the cheddar cheese price by the yield factor used under the Price Support Program for cheddar cheese;
(ii) Multiply the butter price by the yield factor used under the Price Support Program for determining the butterfat component of the whey value in the cheese price computation; and
(iii) Subtract from the edible whey price the processing cost used under the Price Support Program for edible whey and multiply any positive difference by the yield factor used under the Price Support Program for edible whey.
(2) The gross value of milk used to manufacture butter-nonfat dry milk shall be the sum of the following computations:
(i) Multiply the butter price by the yield factor used under the Price Support Program for butter; and
(ii) Multiply the nonfat dry milk price by the yield factor used under the Price Support Program for nonfat dry milk.
(b) Determine the amounts by which the gross value per hundredweight of milk used to manufacture cheddar cheese and the gross value per hundredweight of milk used to manufacture butter-nonfat dry milk for the first 15 days of the preceding month exceed or are less than the respective gross values for the first 15 days of the second preceding month.
(c) Compute weighting factors to be applied to the changes in gross values determined pursuant to paragraph (b) of this section by determining the relative proportion that the data included in each of the following subparagraphs is of the total of the data represented in paragraphs (c) (1) and (2) of this section:
(1) Combine the total American cheese production for the States of Minnesota and Wisconsin, as reported by the Economics and Statistics Service of the Department for the third preceding month, and divide by the yield factor used under the Price Support Program for cheddar cheese to determine the quantity of milk used in the production of American cheddar cheese; and
(2) Combine the total nonfat dry milk production for the States of Minnesota and Wisconsin, as reported by the Economics and Statistics Service of the Department for the third preceding month, and divide by the yield factor used under the Price Support Program for nonfat dry milk to determine the quantity of milk used in the production of butter-nonfat dry milk.Note: The computation of the basic Class II formula price is affected by a determination document published on September 6, 1984, 49 FR 35078.
(d) Compute a weighted average of the changes in gross values per hundredweight of milk determined pursuant to paragraph (b) of this section in accordance with the relative proportions of milk determined pursuant to paragraph (c) of this section.
[Ed.: This excerpt represents almost 2 percent of the full text of this particular marketing order, which contains 28,930 words. When printed (mistakenly, in my case) as standard 10-point Courier text, it totals nearly 70 pages. Milk marketing orders set prices for various regions of the country above market-clearing rates in what the Justice Department in 1977 called "one of the most complicated arrangements that government has yet conceived." If the various documents used to set milk prices throughout the nation were stacked on top of one another, the resulting pile would tower over the average person's head. Senator Patrick Leahy (D-VT) said of the orders, "There are only three people in the nation who fully understand them, and they are not allowed to talk." The dairy cartels that result from these arrangements, it should also be noted, are exempt from antitrust actions.]
