MPP Forecast: December
December 6, 2016
USDA’s National Agricultural Statistics Service (NASS) last week reported the October U.S. average all-milk price at $16.60 per hundredweight., down 70 cents from September’s price. The drop in October was closely related to changes in federal order class prices from September to October, when the Class III price fell by $1.57 per hundredweight, the Class IV price was down by $0.59 per hundredweight., and the Class I mover nudged ahead just 4 cents.
USDA’s Agricultural Marketing Service (AMS) last week also announced the November class and component prices. From October to November, the Class III price rebounded by $1.94 per hundredweight, the Class I mover dropped by $1.82 per hundredweight (mirroring the drop a month earlier in the Class III price), and the Class IV moved ahead by 10 cents. The combined result of these announced price changes is likely to be that the November all-milk price will bounce back to its September level ($17.30 per hundredweight) when it is announced at the end of this month.
USDA-NASS last week also reported feed prices for October. The NASS price announcements will result in a September-October MPP margin of $9.165 per hundredweight. USDA’s current forecast (at right), based on the December 1 CME futures settlements, projects that the MPP margin will remain above $10.00 per hundredweight through 2017. USDA’s MPP margin forecasts are updated daily online.
Dairy farmers have from now until Dec. 16 to enroll in the Margin Protection Program for coverage in 2017, or to change their coverage level if they are already participating in MPP. NMPF’s Future for Dairy website offers a variety of educational resources to help farmers select the desired coverage level.