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MPP Forecast: July 2018

July 5, 2018

For May 2018, the monthly margin under the dairy Margin Protection Program (MPP) rose by $0.16/cwt. from April, to $6.78/cwt. This broke a string of five consecutive drops in the MPP monthly margin. The May all-milk price was $0.40/cwt. higher than April’s, at $16.20/cwt. The May MPP feed cost formula was up by $0.24/cwt. from April, with the increase distributed almost evenly – on a per-hundredweight-of-milk basis – to increases in the reported costs of all three feed components.

Dairy farmers who signed up by June 22 for $8.00 margin coverage at the lower, Tier 1 premium level will receive a May payment of $1.22/cwt. (before a 6.6-percent reduction required by budget sequestration).  Those covered at that level may also receive further, smaller payments this summer, which would raise the projected average net return at $8.00 coverage with Tier 1 premiums to $0.30/cwt. for the entire calendar year.

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.