News & Resources

November DMC Margin Rises, Generates Smallest Payment Since 2020

January 5, 2022

The November margin under the Dairy Margin Coverage program was $9.14/cwt, up $0.60/cwt. from October, as higher milk prices more than offset gains in feed costs. The new calculation will generate a payment of $0.36/cwt. for $9.50/cwt. coverage, which will be the smallest since September 2020.

The all-milk price component of the November margin was $20.80/cwt., $1.10/cwt. higher than a month earlier. The November DMC feed cost was also higher for the month, by $0.50/cwt., with nearly equal contributions from higher corn and soybean meal prices. The November premium alfalfa hay price was down slightly from a month earlier after rising steadily almost every month since September 2020.

The end-of-year dairy futures indicate a possible small payment to $9.50/cwt. coverage for December, but the current strong milk price outlook makes this questionable for future months, given the current market outlook.

Signup for the 2022 DMC program is underway and will close on Feb. 18. This year’s program has paid out $1.2 billion as of January 3, and NMPF is urging dairy farmers who haven’t yet joined the program to do so. NMPF has a page of resources for members who may have questions here.