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MPP Margin Formula Tops $10 in Nov.-Dec. Period

February 6, 2017

USDA’s National Agricultural Statistics Service (NASS) last week reported that the December U.S. average all-milk price was $18.80 per hundredweight, up $1.20 from November. The price increase was greater than indicated by the December federal order class prices announced in early January. NASS also said that the December monthly feed cost, under the current Margin Protection Program (MPP) farm bill formula, is $7.70 per hundredweight., up 8 cents from November. The monthly MPP margin for December is $11.10 per hundredweight., $1.12 higher than November’s monthly margin. The bimonthly MPP margin for November-December is $10.54 per cwt., a rise of $1.38 per hundredweight from the previous margin for the September-October period.

USDA’s current MPP margin forecast (below), based on Jan. 30 CME futures settlements, projects the margin will remain between $10-$11 per hundredweight during all of 2017, with only a slight chance of falling below $8 per hundredweight during any period. USDA’s MPP margin forecasts are updated daily online.

NMPF’s Future for Dairy website offers a variety of educational resources to help farmers monitor the program.