Dairy margins projected to rebound
- amy55735
- May 27
- 1 min read
U.S. dairy margins are forecasted to rebound in the second half of the year. That wasn’t the case earlier this year as margins fell steadily during the first quarter of 2025. Between falling milk prices and feed prices slowly ticking back up, margins through the Dairy Margin Coverage (DMC) program have declined nearly every month since peaking last year in September.
The DMC measures margins using the Income Over Feed Cost (IOFC) method, which takes the All-Milk price less corn, soybean, and alfalfa feed costs, and does not include other expenses or revenues on farm. In March, corn averaged $4.57 per bushel, premium alfalfa hay stood at $242 per ton, and soybean meal was $303.80 per ton, with an All-Milk price of $22 per hundredweight (cwt.). The combined feed costs of $10.45 per cwt. less the All-Milk price gave the $11.55 per cwt. margin for the month.
As for April milk margins, the IOFC is forecasted at $10.31 per cwt. This would be the lowest for the year and less than $1 from the minimum threshold for indemnity payments. After that, IOFC margins are expected to climb back up over $13 per cwt. by year’s end.
Abbi Prins
May 26, 2025
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