The
analysis in this section considers the impact of the price regulation on farm
viability. Analysis is presented
with regard to the impact on the “typical farm” and on the pool of farms as
a whole. Based on this analysis, an
assessment of the rate of attrition is also presented.
Attachments 3a and 3b show the minimum producer or “blend price” payment established under Market Order #1, the over-order producer price for the month, if any, and the combined minimum producer price, being the sum of the two. In months in which there is no over-order obligation imposed on Class 1 milk, there is similarly no over-order producer payment made to producers. (In addition to documenting the prices, the graph also illustrates the extent to which the over-order producer payments stabilize and enhance the return to producers during drops in the federally established price.)
The amount that each producer receives depends on the amount of total pooled milk produced. Attachments 3c, 3d, 3e, 3f and 3g show the average amount received each year by producers in each herd-size group.