Explanations, Cautions and Caveats:

1) Class Price Calculations - the class price estimates calculated use the formulas and data as described by the Final Decision for Federal Order Reform as published by USDA in April 1999 -- except the Class I differentials used are the corrected Option 1a differentials required by Congress. The information presented here calculates class prices based on the NASS price data that has been available since September 1998. While the calculations are accurate based on the new formulas, the class prices generated do not consider any effects that the changes in class and producer prices would have had on supply and demand for milk and dairy products. Therefore caution should be exercised in using the data generated here to describe the impact from implementation of the Final Decision.

2) Producer Price Estimates - the Producer Price Differentials in MCP orders and Uniform Prices (and Uniform Butterfat prices in non-MCP orders) were estimated based on the class prices described above, and by applying estimated class utilizations for the new marketing orders. We believe these to be good estimates, but we will not be able to improve them until we see the orders actually implemented for several months. We have also assumed manufacturing milk would remain pooled despite, in some months, having incentives to de-pool -- however we do flag those months to allow the user to consider how they might adjust the calculated estimate. Given these limitations, we have none-the-less taken our best shot at estimating these prices. We have included an estimated pool adjustment for location value of handlers and producers. We have not included such other pool adjustments as overages or fund reserves. We are willing to consider any better information as that becomes available. Obviously these prices do not include other adjustments such as market service fees, hauling costs, coop dues or assessments, premiums etc…