USDA staff began the task of collecting and reporting a mountain of data that went unreported during the partial government shutdown. One of the first reports updated was November 2018’s Margin Protection Program for Dairy (MPP-Dairy) calculations, released about a month later than scheduled, on Jan. 31, 2019.
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Dave Natzke
Editor / Progressive Dairy

USDA also revised its schedule of other upcoming reports, and December 2018 milk prices and MPP-Dairy margin calculations are now set for release on Feb. 20, 2019.

Milk prices down

For dairy farmers wondering whether there would be any MPP-Dairy indemnity payments for November, the belated answer is no, even though milk prices and margins slipped a bit from October.

The November U.S. average milk price fell 40 cents per hundredweight (cwt) from October to $17 per cwt (Table 1) and was $1.20 per cwt less than November 2017. Through the first 11 months of 2018, the average milk price was $16.15 per cwt compared to $17.68 per cwt in the same period of 2017.

 020119 natzke milk price tbl1

Compared to a month earlier, November milk prices among the 23 major dairy states were nearly all lower (prices were unchanged in Indiana and Texas), led by declines of $1 per cwt or more in Iowa, Minnesota and South Dakota.

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Compared to a year earlier, November 2018 milk prices were down at least $2 per cwt or more in five Midwest states: Illinois, Iowa, Minnesota, South Dakota and Wisconsin.

Florida’s average of $20.80 per cwt remained the nation’s high. The lows were in New Mexico and Kansas, at $15.30 and $16 per cwt, respectively.

Feed prices mixed

November 2018 U.S. average feed costs declined about 10 cents from October to $8.34 per cwt of milk sold (Table 2). The soybean meal price fell about $8.53 per ton from October to $310.62 per ton, the lowest average since September 2017. The U.S. average corn price was unchanged at $3.41 per bushel, and the alfalfa hay price declined $3 per ton to $175 per ton and was the lowest since March 2018.

020119 natzke mpp dairy margin tbl2

MPP-Dairy margin tops $8.66 per cwt

The lower overall feed cost offset most of the decline in the average milk price, resulting in a national average milk income over feed cost margin of about $8.66 per cwt in November. Even though the margin was about 30 less than October, it remained well above the top margin trigger of $8 per cwt, meaning dairy farmers who enrolled in MPP-Dairy at any level will not see a payment for November (Table 3).

020119 natzke mpp dairy paymentstbl3

MPP-Dairy is being replaced by the Dairy Margin Coverage program under the 2018 Farm Bill. USDA had not announced a timetable regarding enrollment.

For an update on 2018 MPP-Dairy payments, processed by state, read: MPP-Dairy nearing last chapter.  end mark

Dave Natzke