Dairy Margin Coverage (DMC) payments will be sent out for the second month in a row. The Farm Service Agency of the USDA said yesterday that the DMC income over feed costs calculation for September is $8.62/cwt. This means that production insured at the $9.50 coverage level will receive a payment of $0.88/cwt.
September’s price for All Milk was $24.40/cwt, which was 10 cents more than August’s price. Premium hay was $342/tonne, which was down $1. Corn was $0.15 less at $7.09 per bushel, and soybean meal was $36.96 less at $473.94 per tonne.
The DMC margin in August was $8.08/cwt, which was $1.84 less than in July. This means that the first DMC indemnity payment for 2022 will be made at the $9.50, $9, and $8.50 coverage levels.
Phil Plourd from Ever.ag says that the margin picture for the future has been getting worse as the prices of dairy commodities and milk futures have been going down while corn prices have stayed stubbornly close to $7 per lb.
“Things aren’t terrible, but margins are thinner than many people thought possible a few months ago,” says Plourd. “It’s another reminder that it pays to sign up for DMC – the deadline for 2023 is Dec. 9 – and look into other tools to manage dairy market price risk.”
