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MPP Forecast: November 2017

November 16, 2017

The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) reported that the monthly Margin Protection Program (MPP) feed cost for September was $7.81/cwt. Compared to last month’s prices, the September corn price was unchanged, soybean meal rose by $7/ton, and alfalfa hay was $2/ton higher. These changes increased the September MPP feed cost calculation from August by $0.08/cwt. NASS also reported that the U.S. average all-milk price was $17.80/cwt in September, $0.20/cwt lower than the August all-milk price. The monthly MPP margin for September was $0.28/cwt lower than the prior month, at $9.99/cwt.

The CME grain futures currently indicate that the monthly MPP feed cost will rise slowly from its current level through the end of next year, but remain below $8.80/cwt throughout that time. The CME dairy futures currently indicate that the all-milk price will remain below $17/cwt during at least the first half of 2018. Combined, the futures indicate that the MPP margin will hover close to $8/cwt during the second, third and fourth bimonthly periods next year, and may drop below that level during May-June 2018. The USDA MPP decision tool margin forecast for most of next year has fallen considerably lower over the past month.

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.