The CME simply reflects present marketplace sales and guesses about the future marketplace supply/demand economics.
The Federal Order equations are irrelevant to the milk marketplace other than setting so-called minimum milk prices for dairy farmers which are also ultimately based on marketplace supply/demand economics.
The marketplace buyers will pay whatever they have to in order to get the milk they need, BUT not a penny more.
If the national milk supply is continuously balanced with or slightly less than profitable demand, most dairy farmers will see a profitable milk price.
The DFA-NE “experiment” may not raise milk prices IF non-DFA-NE milk and/or milk ingredients are imported by DFA from other areas.
The DFA-NE management will determine success or failure in raising milk prices.
I suspect existing DFA management is only interested in stopping the milk dumping (bad P/R) and NOT interested in raising milk prices for their NE co-op members or they would have implemented supply reduction prior to the present dumping.
NDPO has said since 2010, “MATCH SUPPLY with FARMER PROFITABLE DEMAND”!
NDPO Board Member