The Dairy Margin Protection (DMC) program:
- Provided monthly payments to farmers at a chosen price level.
- No extension to 2024, no signup period.
- Significant price difference between cheese and butter.
- Domestic demand for butter absorbs international market decrease.
- Butter exports down 47.7% from 2022, but new record reached in October.
- Milk supply is unaffected by mild weather and good feed quality.
- Hopes for short-lived depressed milk prices, but potential for prolonged low prices without significant demand increase or tighter supply.
The Dairy Margin Protection (DMC) program has been a significant assistance for many farmers in 2023, providing payments for each month if the price level was chosen at $9.50. However, the program has not been extended to 2024, and there is no signup period. The price difference between cheese and butter remains substantial, with Class IV futures having a premium of more than $1.00 throughout the year. Domestic demand for butter remains strong, absorbing much of the decrease in the international market. Butter exports were down 47.7% from 2022, but the price reached a new record in October. Milk supply is not a concern, and mild weather and good feed quality have led to sufficient butter supply. The hope is that depressed milk prices will be short-lived, but without a significant increase in demand or tighter milk supply, low prices may persist for a longer duration.