The September margin in the U.S. Department of Agriculture’s Dairy Margin Coverage Program increased by $0.56 per hundredweight from the August margin. The September margin reached $10.41 per hundredweight, the second-consecutive month margins have fallen outside the threshold necessary to trigger a federal payment.
The increase is the greatest seen since the beginning of 2017, allowing for the change in the alfalfa-hay price in the margin formula’s feed-cost calculation. The September all-milk price was $0.40 per hundredweight greater than August. The Dairy Margin Coverage calculated feed-cost for September was $0.16 per hundredweight. That was less than August, mainly due to a reduction in corn price.
The Dairy Margin Coverage margin is currently projected to remain greater than $9.50 per hundredweight for the remainder of 2019 and during all of 2020. Milk prices are expected to generate most of the monthly changes in the margin forecast. Feed costs are expected to remain relatively stable during that time.
Visit youtube.com and search for XA9ktjDaF1o to watch a National Milk Producers Federation video addressing the use of the Dairy Margin Coverage Program. Visit fsa.usda.gov/programs-and-services for more information.