In March, feedstuff and milk prices held steady, leading to a Dairy Margin Coverage (DMC) margin of $9.65 per hundredweight. This was a groundbreaking occurrence; it was the first time since December 2022 that these prices did not trigger a payment through the dairy risk management program.
The United States Department of Agriculture‘s National Agricultural Statistics Service (USDA NASS) released its agricultural prices report on April 30, which included feed costs used to calculate these crucial DMC program margins and indemnity payments. We saw consistent feedstuff prices and a slight uplift in the all-milk price, which brought the average milk income margin to $9.65 per hundredweight.
March 2024 DMC Margin Factors
Let’s take a quick glance at the March 2024 Dairy Margin Coverage program margin factors, compared to the previous month:
- Alfalfa Hay: $271 per ton, a decrease of $7 per ton
- Corn: $4.36 per bushel, no change from February’s price
- Soybean Meal: $362.17 per ton, down by $1.46
- Total Feed Costs: $11.05
- Milk Price: $20.70
- Margin Above Feed Cost: $9.65
Source: USDA Farm Service Agency, National Ag Statistics Service and Ag Marketing Service – April 30, 2024
All-Milk Price: A Minor Increase
In March 2024, the announced U.S. average all-milk price was $20.70. Even though it was a dime more than the previous month, it was 30 cents lower than March of the previous year. That being said, a majority of the 24 major dairy states experienced a modest increase in milk prices, with several states seeing an improvement of 50 cents or less. Only two states, Georgia and Virginia, recorded increases of $1 or more while Idaho and Pennsylvania were the ones to witness a decrease in their milk checks from the previous month.
Feed Prices Held Steady
Notably, the national average costs for major feedstuffs remained relatively unchanged from February in the three categories used to calculate feed costs. These categories include corn, soybean meal, and dairy-quality alfalfa hay.
Calculated Feed Cost Elements:
“The DMC feed cost for each month is calculated by summing three numbers: (1) the corn price per bushel times 1.0728; (2) the soybean meal price per ton times 0.00735; (3) the alfalfa hay price per ton times 0.0137.”
2024 Enrollment Closed, Margin Forecasts for Remainder of Year
As of April 29, enrollment for the 2024 DMC program closed. The past year witnessed the risk management program being used by 17,120 dairy operations. In total, these farms received nearly $1.3 billion in payments, averaging $75,654 per operation. As we look to the remainder of this year, the DMC forecast doesn’t anticipate margins below the $9.50 per hundredweight threshold, although markets do fluctuate. Stay tuned; the actual margin for April will be announced on May 31st.
