Tag: dairy economics
Falling Prices, Rising Opportunities on Tap for 2023
Record milk prices seen in 2022 likely won’t repeat themselves, as production increases and consumers grapple with an economic slowdown, according to members of the NMPF and U.S. Dairy Export Council’s joint economics unit, in a Dairy Defined Podcast released today. But exports are on track to increase, and demand will likely be resilient as dairy remains must-have for buyers.
“Consumers around the world still gravitate towards dairy, even when they’re experiencing tighter economic situations,” said Will Loux, head of the team Vice President for Global Economic Affairs with NMPF and USDEC. “They ultimately view dairy as an essential item and will continue to consume it.”
Loux discusses the global and domestic dairy outlook with NMPF’s Chief Economist, Peter Vitaliano; Economic Research and Analysis Director, Stephen Cain; and the joint economic team’s newest member, Economic Policy and Global Analysis Coordinator, Allison Wilton. The full podcast is here. You can also find the podcast on Apple Podcasts, Spotify and Google Podcasts. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.
U.S. Milk Production is Climbing
Inflation Taking a Toll on Domestic Dairy Consumption
Rising Input Costs Keep Tight Lid on Milk Production Growth
Dairy Market Report
Dairy Market Report – May 2022
U.S. Monthly Average Milk Price Sets Record High in March
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.
Surging Milk Price Boosts DMC Margin
The January margin under the Dairy Margin Coverage (DMC) program rose just over $2/cwt to $11.54/cwt, fueled by the third-highest ever jump in the U.S. average all-milk price.
A spectacular $2.40 per hundredweight one-month jump in the U.S. average all-milk price in January overpowered a DMC feed-cost calculation that rose only 39 cents in the same period. The monthly milk price gain has only been surpassed in April 2004, when it rose by $2.60/cwt, and June 2020, when it leaped by $4.50 /cwt as part of a price sharp recovery from the onset of the COVID-19 pandemic. That jump returned the price to barely higher than it had been just three months earlier; by contrast, the recent spike capped a series of gains that have pushed the price up by $6.50/cwt over five months.
January’s all-milk price has only been surpassed in five months, all in 2014. Late February dairy and grain futures indicate that feed costs will tend to track milk prices over the next several months to keep the margin from rising much above its January level.
As of February 28, the 2021 DMC program has seen record payments of nearly $1.2 billion to 18,952 enrolled operations, an average of $62,773 per enrolled operation. NMPF urges all dairy farmers who haven’t yet joined DMC to do so. The deadline to sign up for the 2022 DMC program has been extended to March 25. NMPF has a page of resources here for those who may have questions about the program.
Dairy Market Report – January 2022
Dairy Market Report – December 2021
NMPF Statement on the Dairy Pricing Opportunity Act
From NMPF President and CEO Jim Mulhern:
“Sen. Gillibrand’s legislation, cosponsored by Sens. Leahy and Collins, adds bipartisan momentum to a range of critical milk pricing discussions that dairy farmers are having through NMPF’s Economic Policy Committee. NMPF is continuing to work with USDA and Congress on how best to remedy deficiencies in the Class I mover formula and fully recoup $750 million in unintended losses felt by farmers of all sizes. NMPF also is leading discussions on a broad range of Federal Milk Marketing Order reform issues important to producers in all regions of the country. We look forward to pursuing policy improvements that will serve all dairy producers more equitably and effectively.”
