The revised feed margin to the Dairy Margin Coverage program, which now includes a 50% blend of premium and supreme alfalfa hay prices will add 14 to 31₵ to the feed cost formula, resulting in a lower income-over-feed-cost margin and therefore greater payments.
That’s according to Michael Nepveux, an economist with the American Farm Bureau Federation. “This adjustment more closely aligns with rations that dairy producers are actually feeding their cows and more accurately reflects the cost of including top-quality alfalfa in feed,” he says.
Table. Changes in 2019 Feed Cost
Month/2019 Revised Income- Old Income-Over- Increase in
Over-Feed-Cost Feed-Cost Bottomline
January $7.71 $7.99 $0.28
February $7.91 $8.22 $0.31
March $8.66 $8.86 $0.20
April $8.82 $8.96 $0.14
Source: American Farm Bureau Federation
Prices averages for premium and supreme hay are listed in USDA’s Agricultural Prices summary released at the end of each month. The hay prices are listed for California, Idaho, Michigan, Minnesota, New York, Pennsylvania, Texas and Wisconsin.
You can read more analysis of the DMC program and who should sign up here. Sign-up for the program is now open at dairy farmers’ local Farm Service Agency office.