For May 2018, the monthly margin under the dairy Margin Protection Program (MPP) rose by 16 cents/cwt. from April, to $6.78/cwt.
This broke a string of five consecutive drops in the MPP monthly margin.
The May all-milk price was 40 cents/cwt. higher than April’s, at $16.20/cwt. The May MPP feed cost formula was up by 24 cents/cwt. from April, with the increase distributed almost evenly – on a per-hundredweight-of-milk basis – to increases in the reported costs of all three feed components.
Dairy farmers who signed up by June 22 for $8 margin coverage at the lower, Tier 1 premium level will receive a May payment of $1.22/cwt. (before a 6.6-percent reduction required by budget sequestration).
Farmers covered at that level may also receive further, smaller payments this summer, which would raise the projected average net return at $8 coverage with Tier 1 premiums to 30 cents/cwt. for the entire calendar year.
USDA’s MPP margin forecasts can be accessed online. The National Milk Producers Federation’s (NMPF) Future for Dairy website offers a variety of educational resources to help farmers make better use of the program.