Dairy producer margins have risen to the highest level in a year and a half, according to the Milk Margin Above Feed Costs as calculated in the Dairy Margin Coverage (DMC) program.
“Increasing margins are good news for dairy producers and should send signals to them to increase output,” Monica Ganely, analyst with the Daily Dairy Report and founder and principal of Quarterra, an agricultural consulting firm in Buenos Aires. “However, well-publicized barriers, including animal health challenges, expensive financing, and a lack of replacement animals, are impeding the ability of U.S. producers to expand and capitalize on higher margins.”
May’s Milk Margin Above Feed Costs jumped to $10.52/cwt., an increase of 92 cents from April and the strongest margin since November 2022. “Depending on the level of coverage selected by a producer, the DMC program can result in payments when the margin falls below $9.50/cwt.,” Ganely said. “And May marked the third month in a row that no payments would be made.”
By FRAN HOWARD
July 3, 2024
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