USDA ANNOUNCES PRICE TO BE USED IN CALCULATION OF BFP


                                            Release No. 0183.93
                                                               
                                 Becky Unkenholz (202) 720-8998
                                            runkenholz@usda.gov
                               Connie Crunkleton (202) 720-8998
                                           ccrunkleton@usda.gov



USDA ANNOUNCES PRICE TO BE USED IN CALCULATION OF BFP

     WASHINGTON, June 4, 1997--The U. S. Department of Agriculture today
announced that the National Agricultural Statistics Service (NASS) U.S.
average 40-pound block cheddar cheese price will be used by the Agricultural
Marketing Service (AMS) under the federal milk marketing order program to
calculate the Basic Formula Price (BFP) beginning June 5. 

     The new NASS cheese price series is based on a weekly survey of cheese
manufacturing plants throughout the country.  The survey collects price
information on sales of natural, unaged, cheddar cheese at the first
(wholesale) point of sale.  Firms supplying information account for about 85
percent of wholesale sales.  Weekly data reported represent sales
transactions completed during the survey week.  A transaction is considered
complete when cheese is shipped out or title transfers.

     NASS reports average prices and sales volume for 40-pound blocks, 640-pound blocks, and 500-pound barrels.  The 40-pound block cheddar cheese
price data will be used in the computation of the BFP. 

     The BFP serves as the basis for establishing minimum prices for milk
under the federal milk marketing order program.  Cheese prices reported on
the National Cheese Exchange (NCE) had been used in the product price
formula portion of the BFP.  This portion has accounted for less than 5
percent of the BFP value, since its inception.  However, with the closing of
the NCE, a new cheese price series is needed by June 5, to announce the BFP
for May and future months, and to derive a protein price and milk quality
adjustment in 10 federal orders which contain multiple component pricing
plans.  

     Under existing federal milk marketing order regulations, if a price
used to administer the orders is no longer available, the secretary is
authorized to adopt a suitable and equivalent replacement. 

      Details of the equivalent price determination will be published as a
notice in the June 5 Federal Register.  Copies and additional information
may be obtained from John F. Borovies, Chief, Order Formulation Branch,
Dairy Division, AMS, USDA, Room 2771-S, P. O. Box 96456, Washington, D.C.
20090-6456, tel. (202) 720-7183.

                                 
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