Volatility road sign.
September 14, 2020

August PPD’s Are Negative—Again

 |  By: Jim Dickrell

Producer Price Differentials (PPD) are again in negative territory in August—but not as severely negative as June or July.

Even so, there level of negativity would have made headlines under more normal market conditions.

California’s August PPD was -$5.24, up from -$9.82 in July and -$7.91 in June. There was very little Class III depooling in California in August since Class III utilization is fairly low there anyway.

In the Central Order, the August PPD was -$3.62, up from -$8.69 in July and -$7.51 in June. Class III depooling was quite severe in the Central Order this summer, dropping from about 36% Class III utilization in January through March down to about 3% in June through August.

In the Upper Midwest, the August PPD was -$2.06, up from -$4.34 in July and -$3.81 in June. Class III utilization in August was 48.5%, down from 75% to 82% in January through March.

In the Mideast, the August PPD was -$1.75, up from -$8.02 in July and -$7.05 in June. There was very little depooling in the Mideast Order this summer.

For more information, go to your Federal Milk Marketing Order administrator’s website here.