Heading into the holidays, dairy producers have something to be grateful for. Milk-over-feed margins are at historical highs, and feed costs have softened. According to Betty Berning, analyst with the Daily Dairy Report, robust margins could continue into the foreseeable future. If current margins persist, she said, producers will continue to increase output despite a host of challenges.
September margins, reported by USDA’s Dairy Margin Coverage (DMC) program hit an all-time high in September of $15.57/cwt., $2 higher than the previous record hit just a month earlier. Both high cheese prices and lower feed costs helped to boost the margin. CME spot barrel prices climbed to all-time highs of $2.6225/lb. in September, and blocks reached a 2024 high of $2.315/lb. Both increases supported Class III prices, which in turn boosted the All-Milk price, Berning noted.
“September’s All-Milk price of $25.50/cwt. was one of the highest on record, giving producers lots of black ink. The last time that price level was breached was nearly two years ago in November 2022,” Berning said. “In addition, cheap feed costs helped keep the expense side of the ledger down.”
By Fran Howard
November 5, 2024
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