News & Resources

MPP Forecast: May 2018

May 7, 2018

The monthly margin for March under the dairy Margin Protection Program (MPP) dropped an additional $0.12/cwt. from February to $6.77/cwt. This was the fourth monthly drop in the MPP margin, but a much smaller one than the previous three, which were each greater than $1.00/ cwt. The March all-milk price increased by $0.30/cwt. from February, to $15.60/cwt. The March feed cost formula was up by $0.42/cwt. from February, with the increase split almost evenly, on a per-hundredweight-of-milk basis, between gains in prices for all three of the formula’s feed cost components.

USDA’s MPP Decision Tool has been updated to show monthly margins following enactment of the Bipartisan Budget Act of 2018 earlier this year, which changed the frequency of MPP payments from bimonthly to monthly. The tool projects that coverage at the $8.00/cwt. and $7.50/cwt. coverage levels would result in positive net payments in excess of premiums and fees for up to 5 million pounds of production history, based on the April 26 CME dairy and grain futures settlement prices (see chart). Producers have until June 1 to sign up for coverage under the MPP containing the budget legislation’s new, more favorable program provisions. Producers must sign up to be covered for 2018, even if they signed up last year for coverage this year.

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