January DMC Margin Inches Up Just Four Cents Over December
March 5, 2024
The January Dairy Margin Coverage program margin remained mired below the $9.50/cwt maximum Tier 1 coverage level, gaining just 4 cents over December to come in at $8.48/cwt and generating a payment of $1.02/cwt for that maximum coverage.
The national average All-milk price in January dropped $0.50/cwt from December to $20.10/cwt, while a $0.54/cwt drop in the DMC feed cost calculation offset that decline to result in the margin’s small improvement. The feed-cost decline was mostly driven mostly by a falling soybean meal price, assisted by slightly lower corn and premium alfalfa hay prices.
End-of-February futures-based forecasts indicated that DMC margins would remain mostly above the $9.50/cwt maximum Tier 1 coverage level for the rest of 2024.
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