Helping my daughter, a high school senior, contemplate no school, no track, no forensics competitions, no prom and maybe no graduation ceremony due to COVID-19 is a hard conversation. As my wife and I have that tough conversation with her, I can’t help but realize that many in the dairy industry may face tough conversations as well in the year ahead.

Most of the nation’s dairy farmers are paid for their milk production based on multiple component pricing. All federal order multiple component pricing plans pay producers based on pounds of butterfat, protein, other solids and a producer price differential (PPD) per hundredweight (cwt).

What a decade 2010-19 has been. We had the highest milk prices ever in 2014 followed by a very prolonged half-decade with persistently low milk prices.

In 2014, Class III producer milk prices were above $20 per hundredweight (cwt). Milk protein was worth more than butterfat, and amino acid balancing was becoming the accepted technology for increasing butterfat and milk protein component levels.

Increased components and improved quality are adding to basis on milk checks, but dramatically higher hauling charges are pulling overall basis lower in the Midwest, according to Matt Lange, business consultant with Compeer Financial, Baldwin, Wisconsin.