Methodology: Mailbox Milk Price Report
Definition: The Mailbox Price is defined as the net price received by producers for milk, including all payments received for milk sold, and deducting costs associated with marketing the milk.
Data: Included in all payments for milk sold are: over-order premiums; quality, component, breed, and volume premiums; payouts from state-run over-order pricing pools; payments from super pool organizations or marketing agencies in common; payouts from programs offering seasonal production bonuses; and, monthly distributions of cooperative earnings. Annual distributions of cooperative profits/earnings or equity repayments are not included.
Included in costs associated with marketing milk are: hauling charges; cooperative dues, assessments, equity deductions/capital retains, and re-blends; the Federal milk order deduction for marketing services; Federally-mandated assessments such as the National Promotion Program and budget deficit reduction; and advertising/promotion assessments above the national program level. Other deductions, such as loan, insurance or feed mill assignments are not included.
For all markets, the mailbox price is reported at the handlers' average butterfat test (i.e., no adjustment to 3.5 percent).
Reliability: The AMS audit staff periodically perform on-site audits on each reporting agency's payroll records to ensure accurate reporting of mailbox price information. For enforcement purposes, the information used in this report is subject to audit for up to three years after the month reported.
Report Aggregation: The Market Administrators collect the information and calculate prices relative to their reporting areas, then submit to MIB.MIB then combines the data and publishes a weighted average.
