November milk prices, MPP-Dairy margin improve

U.S. average all-milk prices improved in November, reaching their highest point of the year, according to the USDA/NASS Ag Prices report. Combined with lower average feed costs, November's margin calculated under the Margin Protection Program for Dairy (MPP-Dairy) also improved.

USDA estimated the November 2015 U.S. average all-milk price at $18.20/cwt., up 50¢ from October, but $4.80 (21%) less than November 2014's average of $23.00/cwt. The November 2015 average is the highest since December 2014.

Through the first 11 months of 2015, the U.S. all-milk price averaged $17.07/cwt., $7.22 (30%) less than the same period a year earlier, when the average was $24.29/cwt.

Compared to October 2015, month-to-month prices rose 80¢/cwt. or more in Arizona, Colorado, Indiana, Kansas, New Mexico, New York, Ohio, Pennsylvania, Utah, Vermont and Washington. Only California (-1¢) registered a decline, with Minnesota unchanged.

The highest November 2015 average price was in Florida, at $22.20/cwt., with the lowest average in California, at $16.12/cwt. (see table).

 

Prices received for all milk, major dairy states and U.S. ($/cwt.)

 

Nov. 2014

Oct. 2015

Nov. 2015

Arizona

21.80

16.80

17.60

California

20.52

16.13

16.12

Colorado

23.40

18.20

19.00

Florida

27.30

21.50

22.20

Idaho

22.40

17.10

17.60

Illinois

24.10

17.90

18.30

Indiana

23.50

18.00

19.00

Iowa

23.70

17.60

18.00

Kansas

23.60

17.40

18.20

Michigan

23.00

17.30

17.80

Minnesota

24.40

17.70

17.70

New Mexico

21.10

16.60

17.50

New York

23.80

19.20

20.00

Ohio

23.60

18.80

19.60

Oregon

24.90

19.40

19.80

Pennsylvania

24.40

19.40

20.30

S. Dakota

24.50

18.70

19.00

Texas

23.90

18.40

19.10

Utah

23.80

17.40

18.40

Vermont

24.10

19.30

20.10

Virginia

26.30

20.60

21.40

Washington

22.70

18.50

19.40

Wisconsin

24.30

17.60

18.20

U.S.

23.00

17.70

18.20

Source: USDA

     

 

November MPP-Dairy is $10.01/cwt.

USDA's Farm Service Agency (FSA) announced an MPP-Dairy November 2015 margin of about $10.01/cwt., the largest monthly margin so far this year. Unless the bottom falls out of margins in December, there will be no MPP-Dairy indemnity payment at any insurable level for the final two-month pay period.

November margins rose thanks to the higher U.S. average milk price, combined with lower average feed prices. Alfalfa hay and soybean meal prices were the lowest of the year, with the November corn price near the low set in June.

USDA/FSA listed the following average prices factoring into the November margin:

• Corn: $3.60/bushel, down 7¢ from October

• Soybean meal: $308.60/ton, down $19.37/ton

• Alfalfa hay: $150/ton, down $6/ton

• Final feed costs: $8.19/cwt., down about 30¢/cwt. from October.

• All-milk price: $18.20/cwt., up 50¢/cwt.

• Milk margin minus feed costs: $10.01471/cwt., up 80¢/cwt.

To see factors used in the calculation, visit www.fsa.usda.gov/Internet/FSA_File/mpp_prices.pdf.

 

State differences

USDA uses national average milk, corn and alfalfa hay prices, along with a central soybean meal price, to calculate the monthly national MPP-Dairy income margin.

It's difficult to drill down into regional and state margins based on USDA data, since milk prices are averaged for 23 states, average alfalfa hay prices are reported for 18 of those states, and corn prices are reported for 12 of the major dairy states.

Alfalfa hay, corn and milk prices are reported for 11 common states. Including the single soybean meal price for those 11 states, Dairy Herd Management calculated individual state margins for November 2015, using the MPP-Dairy formula. It ranges from a high of $11.75/cwt. in South Dakota to a low of $9.04/cwt. in Michigan, a difference of $2.71/cwt.

 

Dairy income margins for selected states, using MPP-Dairy formula

   

State

Alfalfa

hay

Corn

Soybean

meal

Total

feed

Milk

State

margin

 

($/ton)

($/bushel)

($/ton)

($/cwt.)

($/cwt.)

($/cwt.)

Colorado

160

3.72

308.60

8.45

19.00

10.55

Illinois

160

3.69

308.60

8.42

18.30

9.88

Iowa

125

3.53

308.60

7.77

18.00

10.23

Kansas

110

3.72

308.60

7.77

18.20

10.43

Michigan

200

3.50

308.60

8.76

17.80

9.04

Minnesota

109

3.43

308.60

7.44

17.70

10.26

Ohio

200

3.87

308.60

9.16

19.60

10.44

Pennsylvania

253

3.77

308.60

9.78

20.30

10.52

South Dakota

107

3.28

308.60

7.25

19.00

11.75

Texas

212

4.03

308.60

9.50

19.10

9.60

Wisconsin

93

3.42

308.60

7.21

18.20

10.99

United States

150

3.60

308.60

8.19

18.20

10.01

Source: Dairy Herd Management

       

All November 2015 prices reported by  USDA

       

 

 
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