Optimism Ahead for Lower Dairy Feed Costs

Despite high milk prices, dairy producer profitability is suffering due to heightened feed costs. In the first two months of 2023, soybean meal prices were $125 per ton, higher than the previous decade’s average. Corn prices were $2.27 higher, and alfalfa prices in the Dairy Margin Coverage (DMC) calculation are $153 per ton higher.

Due to the increased costs, the January and February DMC margin was just $1.56 per cwt, lower than the previous decade, even with $22 milk. However, a friendly crop forecast on the horizon could bring some much-needed relief. USDA’s prospective plantings report indicates an increased corn supply and an easing of drought conditions in crucial alfalfa-producing states.

Read more on dairy profitability here. Contact your trusted ProAg agent today to learn about Dairy Revenue Protection.