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MPP Forecast: August 2018

August 7, 2018

The monthly margin under the Margin Protection Program (MPP) for June 2018 was $7.37/cwt., $0.58/cwt. higher than the May margin. The June all-milk price was $16.30/cwt., $0.10 higher than a month before, and the June MPP feed cost formula was $0.48/cwt. lower than in May. More than half the drop in the monthly feed cost was due to lower soybean meal prices.

Dairy farmers who signed up for $8.00 margin coverage at the lower, Tier 1 premium cost would receive a net return of $0.46/cwt. – after payment of premiums and sequestration reduction of payments – on their covered milk production for all of 2018, based on USDA’s MPP Decision Tool forecast calculated using the August 6 CME dairy and grain futures settlement prices, shown in the graphic.

USDA’s MPP margin forecasts can be accessed online. NMPF’s Future for Dairy website offers a variety of educational resources to help farmers make better use of the program.