MPP Forecast: August
August 4, 2017
The monthly Margin Protection Program (MPP) feed cost for June was $7.97/cwt, based on corn and alfalfa hay prices reported last week by USDA’s National Agricultural Statistics Service (NASS) and soybean meal prices reported by the department’s Agricultural Marketing Service. NASS also reported that the U.S. average all-milk price rose $0.60/cwt. from May to $17.30/cwt in June. The monthly MPP margin for June was $9.33/cwt, bringing the bimonthly margin for May-June to $8.97/cwt.
The monthly all-milk price for June was $0.80 per hundredweight higher than in April, and the same as in March. The current CME dairy futures markets collectively predict that it will add at least another $2/cwt. by the end of this year. The CME futures continue to project modest increases in corn prices and virtually flat prices for soybean meal through the end of the year. The NASS alfalfa hay price dropped slightly from May to June after increasing steadily from $128 per ton in January to $155 per ton in May. USDA’s current MPP margin forecast, shown above, based on the July 28 CME futures settlements, continues to project that the margin will remain well above $8 per hundredweight during 2017, with essentially no chance that it will fall below that level before 2018.