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2022 Ends with No DMC Payments; 2023 May Be Different

February 1, 2023

The December DMC margin was $9.76/cwt, down $1.13/cwt from the month before but still above the $9.50/cwt threshold for federal payments at the highest insurance level. Much of this decline was contributed by a $0.90/cwt fall in the U.S. average all-milk price, to $24.70/cwt. The DMC December feed cost rose $0.23/cwt from November, on higher corn and soybean meal prices.

The DMC margin fell below the highest coverage level of $9.50/cwt during just two months of 2022, as record high feed costs were generally topped by record high milk prices. This year’s outlook is very different, with the DMC margin currently projected to fall below $9.50/cwt every month until sometime next fall and to average around $8.00/cwt for the year.