The June margin under the Dairy Margin Coverage (DMC) program dropped 65 cents from May’s margin to $6.24/cwt, which will generate a June payment of $3.26/cwt for the $9.50/cwt coverage.
The DMC feed cost calculation for June was lower by $0.16/cwt of milk from May, mostly on lower soybean meal prices, while the June U.S. average all-milk price took a larger than expected drop of $0.80/cwt from May, a return to April levels. The blended alfalfa hay price increased in June, for the ninth straight month.
The current futures-based price outlook indicates that the DMC margin will not rise much above $7.00/cwt through the summer and remain below $9.50/cwt through the end of 2021.
More information can be found on the National Milk Producers Federation website.