The deadline to enroll for the USDA’s Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) programs is approaching fast. The last day for producers to sign up is Monday, April 29, 2024.
Dairy producers have adjusted to uncertainties that face them such as rising feed costs, ongoing labor challenges and navigating a pandemic and its ripple effect. Three producers share how they tackle uncertainties.
Dairy products continue to be offered on the spot market even though prices are already low. Sellers seem to want to move product and limit inventory rather than maintain a higher supply for upcoming demand.
Phil Plourd, president of Ever.Ag Insights, says that from a producer perspective, risk management decisions have gotten tougher in the past few months. Penn State offers tips to be considered when using milk futures:
As the calendar moves past the spring milk production peak, dairy farmer’s attention remains laser-focused on the milk price and overall margin outlook throughout the remainder of this year.
With today’s market conditions, producers are capitalizing on strong beef prices. More cows went to slaughter in March, the highest total since 1986, the year of the whole-herd buyout program.
The March 2023 USDA Milk Production report showed a 0.5% increase in year-over-year milk production. Cow numbers also showed an increase of 31,000 head over last year, but production per cow only gained 3 lbs.
History likes to repeat itself. Prior to last year, the last time milk prices were great was in 2014 and we all know what followed—lackluster milk prices. Although producers are better positioned today vs. 2014.
The 2023 calendar year is off to a fast start and 90 days into the New Year leading economists say that milk production has been weaker than anticipated.
Spot milk prices continue to remain lower than usual since the end of last year. Many plants are not purchasing the available milk even though plant capacity is not fully utilized.
For the second time this year, a Dairy Margin Coverage (DMC) payment will be issued. The USDA’s Farm Service Agency announced that March’s DMC income over feed costs calculation is $6.19/cwt.
Warren Buffet saying, “Rule No. 1: Never lose money. Rule No. 2, don’t forget Rule No. 1” is widely known. Dr. Brady Brewer from Purdue University said it is unlikely that Buffet spends much time working in ag.
The recent movement of barrel cheese is similar to some previous moves over the past two years. Each time price peaked and fell faster than it increased. Will this pattern again be repeated?
The rollercoaster of the dairy industry certainly isn’t new. Dan Basse told the PDPW audience last week that a great reset is underway for the dairy economy, which will spell a more competitive world market.
A different story is unfolding in 2023 with a decline in milk prices, while expenses continue to remain high. What are the best recommendations to help position yourself for a good start for the first half of the year.
In its March World Ag Supply and Demand Estimates (WASDE) report, the USDA increased its U.S. milk production forecast for 2023. Milk price predictions, however, went in the opposite direction.
The rollercoaster of milk prices is something we have seen before. Dr. Kevin Bernhardt with the UW-Extension recommends producers do a sensitivity analysis and ask, ‘How quickly can your good fortunate change?’
One glance at the milk futures and it’s hard to be optimistic, especially coming off a record milk market year. Simply stated, the second half of the year presents opportunities that come with bittersweet reviews.
For the first time this year, a Dairy Margin Coverage (DMC) payment will be issued. Yesterday, USDA’s Farm Service Agency announced that February’s DMC income over feed costs calculation is $7.94/cwt.
