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Component
pricing: 1) CROPP will
use a pay price program based on product utilization.
The component prices would be as follows for $18.20:
Hauling:
There will be a $75 stop charge per month for CROPP producers.
Somantic
Cell Adjuster:
1) FMMA type formula
(.05 x $4.80) to yield $.24 per 100,000 on a multiple basis.
The hinge point is 350,000. The maximum deduction is for a cell count of
1,000,000. As an example a somantic
cell count of 250,000 would result in a $.24 premium while a somatic cell count
of 275,000 would result in a $.18 cwt. premium.
Standard
Plate Count:
1) FMMA type formula (.05 x $4.80) to yield $.24 cents per 100,000
on a multiple basis. The hinge point
is 25,000. The maximum deduction is
for a plate count of 1,000,000. As
an example, a standard plate count of 5,000 would result in a $.048/cwt premium,
while a standard plat count of 10,000 would result in a $.036/cwt premium.
2) To receive the premium the milk must
pass standards for cryoscope testing and show no inhibitors.
P.I.
Adjuster - Psychrophile Preliminary Incubation:
CROPP Cooperative has a P.I. premium/deduct program.
The following premium/deduct program will apply to all CROPP producers.
Count(1000)
Premium$
0-15
$.50
16-30
$.25
31-50
$.00
51-100
-$.25 deduct
101-200
-$.50 deduct
201-750
-$1.00 deduct
750+
-$2.00 deduct
Pay
Price Principle:
The CROPP producers have elected to have a stable pay price not
connected to conventional pay price. This
means that the organic premium varies from $1.50-$8/cwt with an average around
$5/cwt organic premium for the last 5 years.
The CROPP producers, through the Dairy Pool and Dairy Executive
Committee, have designed this premium program because they feel it is the
fairest to all producers and reflective of the performance of the business.
The Cooperative makes all efforts to meet the established budget base
price, however, the price can be adjusted by the Board of Directors and the
Dairy Executive Committee if the actual financial performance of the co-op
requires it.
Seasonal
Pay Price Variability:
The Cooperative’s pay price plan incorporates a scheduled seasonal pay
price variation to provide an incentive for level production, as determined by
Dairy Executive Committee policy. The
present pay price plan utilized the following seasonal pay price variations:
1)
$0.50 per hundredweight deduction in pay price for the months of
May, June and July
2)
$0.50 per hundredweight increase in pay price for the months of
October, November and December.
Dairy
Pool Capital Base Plan:
To meet the requirements of the Dairy Pool Capital Base Plan, CROPP
farmers are required to purchase preferred stock equivalent to 5.5% of their
annual base gross income. Calculation
of this is based on:
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1)
the pay program of the Member’s region,
2)
the individual Member’s components
3)
the Member’s established production base.
Preferred stock is purchased in $50
increments and receives 8% interest annually, to be paid as a dividend or
reinvested in preferred stock. The
producer and CROPP will analyze the previous year’s production and average
component breakdown, arriving at a pay price that will be used to determine 5.5%
of annual base gross income. One of
the following methods will then be used to fulfill the CROPP equity
contribution:
1)
The producer will purchase preferred
stock equivalent to 5.5% of annual base gross income prior to first milk
shipment with CROPP Cooperative.
The
producer will take a $1 per cwt checkoff until the equity contribution is met.
Interest will not begin to accrue until the total equity contribution is
met.
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