The answer lies with improved milk production beginning in October last year. Record temperatures this past summer depressed milk per cow in much of the south, southeast, southwest, and in California. In the summer months, total milk production dropped below year ago levels. Cheese sales remained strong. The result was record BFP's for October, November, and December.
Cheese production is also up.
C heese prices and the BFP normally do decline seasonally from January to about May as milk production improves seasonally. So, a decline in the BFP this time of the year is normal. But still the size of this drop raises questions. I will attempt to explain how the BFP is calculated and shed some light on the record BFP drop. F irst, the BFP is calculated in two steps.