The trajectory of dairy margins continues to improve in 2024, as average profitability reached $12.33 per hundredweight (cwt.) in July. This was the highest margin for making milk since May 2022. Forecasts for the remainder of the year expect margins to reach nearly $16 per cwt., according to the Dairy Margin Coverage (DMC) program estimates given current milk and feed price projections.
In 2018, Congress passed the farm bill that included DMC, a voluntary program that offers protection to dairy producers when the All-Milk price and average feed costs fall below a threshold that is selected by the producer. With a minimum selection of a $9.50 per cwt. margin, dairy producers can enroll in DMC to have coverage should margins fall below their selected level.
Abbi Prins
September 12, 2024
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