Dairy outlook and management suggestions
Each month, the U.S. Department of Agriculture Economic Research Service publishes the Livestock, Dairy and Poultry Outlook. Each report analyzes the economic impacts of month-to-month changes in USDA’s WASDE reports. This article will review the dairy section of the report and provide management suggestions to consider.
The Dairy Margin Coverage Program was authorized in the 2018 Farm Bill to offer protection to producers when the difference in the national all-milk price and the national average feed price falls below the producer-selected margin. Reduced milk prices and increased feed costs resulted in the margin calculated for the Dairy Margin Coverage program to decline $4.83 in May, $7.68 lower than in May 2022. This is the lowest dairy farm margin so far in 2023.
The Class III milk price is projected at $16.05 per hundredweight because of expected lower prices for cheese and dry whey. This represents a reduction of $.65 from the forecast last month. Class IV and the all-milk price are projected down compared to the previous month’s forecast. Class IV is forecast at $18.20 per hundredweight and the all-milk price for 2023 is at $19.55 per hundredweight.
Chris Zoller and Mike Estadt
August 3, 2023