Milk Prices Fall in New Year

Dairy could have a rough start to the new year. If futures markets are accurate, the strong All-Milk price and falling feed costs in 2022 may not stick around. The Dairy Margin Coverage’s (DMC) “milk margin above feed costs” was $10.89 in November, $1.39 per hundredweight above the $9.50 threshold to initiate DMC payments.

However, milk prices may be falling faster than feed costs have been. The January to June 2023 Class III six-month bundle has fallen $1.40 from December to January. Class IV has fallen $.65 in the same time. Just before Christmas, the seven-product bundle fell 3.8% and another 2.8% on January 3. Given the evolving equation, price risk mitigation will be vital in this first quarter of 2023.

Read more on DMC and Dairy Revenue Protection (DRP) here.

Read more on ProAg’s DRP policies here.