Dairy producers shouldn't feel an impact due to upcoming changes in Chicago Mercantile Exchange (CME) rules regarding nonfat dry milk (NFDM) spot call prices, according to Eric Meyer with the HighGround Trading Group.
On Jan. 13, CME published amendments to Chapter 54S of their rulebook which governs the NFDM spot call. These rules are set to take effect on Jan. 27.
Under the change, Extra Grade NFDM will no longer be eligible to be traded at the CME; Grade A will be the only NFDM item on the spot call.
According to Meyer, California class milk prices incorporating NFDM in the price formula are priced off the California Weighted Average Price, published by the California Department of Food & Agriculture. Federal order prices incorporating NFDM in the class pricing formula use USDA’s weekly National Dairy Product Sales Report.
Other CME changes primarily cover grading certificates, product inspection and CME invoicing/billing.
To view the amended chapter of the NFDM spot call rules as published on the CME’s website, click this link.