Payments have been triggered for USDA’s Dairy Margin Coverage (DMC) program for the first three months of 2023. Margins have been $7.94 per cwt. in January, $6.19 per cwt. in February and $6.08 per cwt. in March. The downward trend implies a less-than-optimistic scenario for milk margins.

The three margins are below the former Margin Protection Program’s (MPP), which existed from 2014 to 2018, meaning DMC remains more sensitive to adverse dairy market scenarios. Looking at the futures market, Class III milk price is also on a downward trajectory. However, other commodities also experiencing price declines could ease some margin tightness on dairy producers.

Read more on milk margins here.