Insuring butterfat, protein and other solids prices at the producers selected butterfat and protein levels (other solids is fixed at standard levels).
Butterfat Price Formula:
(Butter Price - $0.1715) x 1.211 = Butterfat Price ($/lb)
Other Solids Price Formula:
(Dry Whey Price - $0.1991) x 1.03 = Other Solids Price ($/lb)
Protein Price Formula:
Protein Value in Cheese + (Butterfat Value in Cheese - Butterfat Value in Butter) * 1.17 = Protein Price ($/lb)
All three of the above formulas are the building blocks of the Class III Equation. for further detail and expansion of the protein price see the link below