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.