Tag: dairy economics

June DMC Margin Gains $1.14/cwt to $11.66/cwt

Posted on by Theresa Sweeney

The Dairy Margin Coverage Program margin in June was $11.66/cwt after adding $1.14/cwt over the previous month.

The June all-milk price was $22.80/cwt, up $0.80/cwt from May, and the DMC feed cost dropped by $0.34 for the month, mostly on a lower premium alfalfa price. The DMC margin calculated by USDA has risen $2.06/cwt over the past two months, reaching a level well above the threshold at which payments are generated by falling margins.

Futures-based forecasts at the end of July indicate that the DMC margin will average about $11.90/cwt during 2024, $0.40/cwt higher than similar forecasts indicated a month ago, with a peak in October, a sign that producers may have an opportunity to repair battered balance sheets over the next several months.

Dairy Data Delights, and Completes Your Summer Reading List

Posted on by Theresa Sweeney

Impress your friends and dazzle your pub trivia team: Did you know that the average American worker only needs to work half as long to pay for a half gallon of ice cream as in 1960? Can you say, luxurious and affordable?

It’s in the numbers. Despite hourly wages that averaged $2.09 an hour the year John F. Kennedy was elected president (and both Joe Biden and Donald Trump were teenagers), the relative changes in wages and ice cream prices have made America’s favorite frozen dessert (Happy National Ice Cream Month) twice as affordable now, according to Labor Department data. What once took nearly 25 minutes of a U.S. worker’s hourly wage to buy takes less than 12 minutes now.

Butter holds a similar ratio, and whole milk and cheese affordability has also improved significantly. And still, some people long for the good old days.

You can find this information on page 85 of Dairy Data Highlights, a compendium of historical dairy statistics compiled by the NMPF/USDEC Dairy Economics Unit. The publication features facts on the evolution of farm sizes, milk production and dairy revenues, and the emphatic growth in the prominence of trade to the U.S. dairy economy. (Commercial dairy exports, 1985: 571 million pounds of milk equivalent. Commercial dairy exports, 2022: 40,581 million pounds.)

Suffice it to say, Dairy Data Highlights makes everyone’s summer beach reading list complete. And unlike current best sellers like “The Women,” or “On Call,” Dairy Data highlights is free – just download here.

That’s why the entire dairy community needs to know of this resource. See the rise in average herd sizes! Be wowed by the growth of processed gruyere exports! But mainly, know that this is out there. And use it as you need.

April DMC Margin Little Changed from March

Posted on by Theresa Sweeney

The April Dairy Margin Coverage Program margin was $9.60/cwt, down by $0.05/cwt from March, just above the maximum $9.50/cwt maximum Tier 1 coverage level for the second month in a row.

The April All-Milk price dropped from March by $0.10/cwt to $20.50/cwt, and the April DMC feed cost calculation dropped by $0.15/cwt, on a $11/ton lower premium alfalfa hay price. Small changes in the corn and soybean meal prices offset each other on a per hundredweight of milk basis in the formula.

Available forecasts at the end of May indicate an increasingly high likelihood that the DMC margin will remain considerably above $9.50/cwt for the rest of the year.

NMPF’s Vitaliano Offers 2024 Dairy Economic Outlook

Posted on by Chris Galen

 

NMPF’s Vice President of Economic Policy Peter Vitaliano provides Dairy Radio Now listeners a look ahead at what farm-level milk prices will do in 2024. Farmers should benefit from lower feed costs, and with milk production expected to remain stagnant again this year, prices should gradually improve.