TeachMeFinance.com - explain Class I differential
Class I differential The term 'Class I differential ' as it applies to the area of agriculture can be defined as ' Under federal milk marketing orders, the minimum price a processor must pay for milk used for fluid consumption (Class I milk) is the basic formula price plus the Class I differential. The Class I differential varies by about $3.00 per hundredweight (cwt.) between the Upper Midwest and Southeast Florida. The Class I differential accounts for the costs of transporting milk, the added costs of marketing milk going into fluid milk products, and the higher cost of producing Grade A milk required for fluid products'.
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