The following article is courtesy of the National Milk Producer’s Federation:
The Dairy Margin Coverage (DMC) program margin for May was $5.37 per cwt., the lowest since July 2013 and $0.65 per cwt. lower than the margin for April. Still, projections show that June’s margin may see the highest jump since 2000, with a strong recovery in prices that should buoy margins through the rest of the year.
The April to May drop in the DMC margin was due to an $0.80 per cwt. lower all-milk price, offset by a $0.15 per cwt. lower calculated feed cost. The May margin will generate a payment of $4.13 per cwt. that month for producers enrolled in the program this year at the $9.50 per cwt. margin coverage level and smaller payments for producers enrolled all the way down to $5.50 per cwt.
The current USDA forecast for the June margin is $10.86 per cwt., $5.49 per cwt. higher than the May margin and by far the largest one-month increase in the MPP/DMC margin since at least January 2000, the earliest margin data available.”
The USDA/FSA Decision Tool’s current forecast for the remainder of the year, shown below, indicates the margin will peak in July at almost $13 per cwt., then drop back toward $9.50 per cwt. during the remainder of the year.
The DMC information page on NMPF’s website offers a variety of educational resources to help farmers make better use of the program.