Tag: dairy prices

U.S. Monthly Average Milk Price Sets Record High in March

Posted on by Theresa Sweeney

The highest-ever monthly U.S. average all-milk price was reported by USDA’s National Agricultural Statistics Service (NASS) for March, at $25.90/cwt. This was twenty cents per cwt higher than the previous record, in September 2014, the only year – until now – in which the monthly all-milk price topped $25.00/cwt.

The futures-based outlook for the milk price for all of calendar year 2022 halted its steady ascent since last summer during the fourth week of March, but it hasn’t dropped below $26.00/cwt since then, indicating there may be more monthly records ahead for this key measure of U.S. dairy farmers’ gross incomes from milk sales.

USDA has reported the March margin under the Dairy Margin Coverage program to be $11.55/cwt. Since March 2021, the DMC feed cost has increased by $3.22/cwt, while the all-milk price has risen by $8.50/cwt over the same period. The DMC Decision Tool on the USDA Farm Service Agency DMC website predicts that DMC margin will remain above the $9.50/cwt maximum coverage level under the program for the remainder of 2022.

NMPF Advances Marketing Order Discussions at March Board Meeting

Posted on by Theresa Sweeney

NMPF celebrated strong global demand for U.S. milk in a time of turmoil and asserted leadership in its efforts toward Federal Milk Marketing Order modernization during its Board of Directors meeting March 8-9.

High on NMPF’s list of priorities for 2022 is leading discussions on updating the Federal Milk Marketing Order system, the bedrock of orderly milk markets in the U.S. NMPF is taking a deliberate approach toward meaningful modernization, crafting consensus among all sizes and regions, said Jim Mulhern, president and CEO of NMPF.

“We may take the rest of this year to get this all done and get it right,” Mulhern said. “If we can keep a spirit of collaboration going throughout the process, we’re going to end up in a very good place. I’m confident that we’ll have a national federal order hearing proposal that reflects the consensus of our membership and reflects the needs of dairy producers across the country.”

NMPF’s Economic Policy Committee since last fall has been conducting analysis and engaging with farmers on the FMMO system, created in the 1930s and last updated in 2000.

NMPF’s board also discussed the response of agriculture and dairy to the humanitarian crisis in Ukraine and potential resulting volatility in agricultural markets. Board members pledged to seeks ways to assist Ukrainian families and farmers as the fast-developing situation evolves. The board unanimously adopted a resolution calling on policymakers “to immediately take the steps necessary to facilitate increased domestic energy production of all forms” to avoid agricultural supply disruptions at a time of already high and rising input costs.

Other topics ranged from sustainability to supply chains during the meeting, which also featured remarks from Rep. Glenn “G.T.” Thompson, R-PA, ranking member of the House Agriculture Committee. Valerie Lavigne, a dairy farmer from Schaghticoke, NY, and a member of Agri-Mark, also spoke in her new role as chairwoman of NMPF’s Young Cooperators.

New directors welcomed to NMPF’s board included:

  • Rob Byrne, Dairy Farmers of America
  • Chris Sukalski, Land O’Lakes
  • Andy Mason, Land O’Lakes
  • Frank Doll, Prairie Farms

Inflation is Hot. Dairy Stays Cooler.

Posted on by Theresa Sweeney

It will come as no surprise to anyone reading this that inflation’s eating away at pocketbooks. The most recent Consumer Price Index is reporting the fastest retail price increases in costs in 40 years, with a hot economy and tight supply chains pushing up everything from cars to coffee.

And when consumers (and media outlets) focus their frustration, it tends to be on the prices that are most widely noticed. Gasoline’s the best example – what other product routinely posts its price on big signs next to highways? A gallon of milk is another one – when you’re in 94 percent of households, you can safely assume that a big part of the consuming public knows exactly what milk costs – and notices when it rises.

But before you pass unfair judgment on a jug of liquid goodness, a chart:

This is the most recent year-over-year Consumer Price Index covering overall inflation, food and beverage inflation, and dairy categories. A gallon of whole milk (the most popular variety in a jug) is going up, but it’s in line with other foods and beverages and lower than overall inflation. Subcategories fare even better. Cheese costs to consumers have barely budged. Ice cream remains an affordable (and relative to other categories, becoming even more so) treat. And yogurt, butter, et. al remain a compelling choice of affordable, high-quality nutrition for households.

So what’s going on with the inflation gap? A few things. Dairy supply chains tend to be more local and predominantly domestic, meaning some factors driving price gains in imported goods don’t apply. Dairy farmers have also done a great job of keeping markets adequately supplied, even in a year of record dairy export sales.

But whatever the reasons — if you’re frustrated with your grocery bill, dairy’s a place to find value. Dairy farmers are doing their part in keeping food prices under control. So much so, in fact, it might be worth slowing down a little bit the next time you’re pushing your cart past the dairy case. You might just want to take advantage of the opportunity dairy provides to nourish your family, without emptying your wallet. That’s not to be taken for granted these days.

Dairy Defined Podcast: Price Forecast Positive for Dairy, NMPF’s Vitaliano Says

Posted on by Theresa Sweeney

Dairy prices for 2022 are projected at an eight-year high, with supply adjustments and booming exports across a wide range of products shoring up farmer balance sheets that have struggled with volatility during the pandemic era, NMPF Chief Economist Peter Vitaliano says in an NMPF podcast released today.

Due to tight supplies “not only is the outlook for milk prices the best in eight years, but that’s also the case for the individual dairy products,” Vitaliano said. Peter Vitaliano. “The big question is, with milk prices this good and feed prices not going up as fast as they were last year, how long is that tightness going to continue? And how soon will it be before we see some expansion of milk production again?”

Vitaliano, who also writes NMPF’s monthly Dairy Market Report, also encouraged farmers to sign up for the Dairy Margin Coverage program, which has a deadline of Feb. 18 for 2022 assistance. “The futures markets look very good at the moment, but there are many months to go. The history of dairy farmers second-guessing the markets, even based on the futures, is not very good. And again, given how inexpensive coverage is, our recommendation continues to be you should sign up for the program.”

NMPF resources on the Dairy Margin Coverage Program can be found here.

The full podcast is here. You can find and subscribe to the podcast on Apple Podcasts, Spotify,   Google Podcasts and Amazon Music under the podcast name “Dairy Defined.” A transcript is also available here. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.

September DMC Margin Is Large Improvement Over August

Posted on by Theresa Sweeney

The September margin for the Dairy Margin Coverage program rose by $1.68/cwt from a month earlier to $6.93/cwt. The jump was driven by a mostly corn price-driven $0.98/cwt drop in the feed cost formula and an $0.80/cwt increase in the all-milk price, to $18.40/cwt.

The resulting $2.58/cwt September DMC payment for $9.50/cwt coverage will be the ninth consecutive such payment well in excess of $2/cwt this year, with the nine-month average totaling $3.08/cwt. When USDA eventually tops up the payments for this year and last with the full dairy-quality alfalfa price figured into the feed cost calculation, the 2021 average payment for the first nine months will be $3.31/cwt.

USDA is expected to pair the announced regulation on the alfalfa price change with that for the separate Supplemental DMC program.

USDA reported that, as of Oct. 25, the 19,029 operations enrolled in this year’s DMC program are expected to receive $981,249,096 in payments, for an average of $51,566 per enrolled operation, based on previously announced margins. This represents payments for January through August and does not include the eventual top-up payments from the alfalfa price change. The dairy futures continue to indicate that there will be at least another DMC payment for $9.50/cwt coverage during the final three months of the year.