The USDA National Agricultural Statistics Service (NASS) released its latest Ag Prices report on Dec. 29, including factors used to calculate November 2023 Dairy Margin Coverage (DMC) margins and indemnity payments. Although mixed compared to a month earlier, overall U.S. average feed costs were lower and milk prices were up, pushing the average milk income margin up 14 cents per hundredweight (cwt) and just above the top indemnity payment trigger.

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Editor / Progressive Dairy

November 2023 DMC at a glance

DMC program margin factors compared to previous month:

  • Alfalfa hay: $271 per ton, down $7 from October 2023
  • Corn: $4.66 per bushel, down 27 cents
  • Soybean meal: $467.27 per ton, up $48.11
  • Total feed costs: $12.12 per cwt, down 4 cents
  • Milk price: $21.70 per cwt, up 10 cents
  • Margin above feed cost: $9.58 per cwt, up 14 cents

Source: USDA Farm Service Agency, National Ag Statistics Service and Ag Marketing Service, Dec. 29, 2023

Milk prices mixed

The November 2023 announced U.S. average milk price rose 10 cents from October to $21.70 per cwt, the highest since January 2023. It was still down $3.70 per cwt from November 2022’s revised average of $25.40 per cwt.

November milk prices were mixed across the 24 major dairy states, with prices down from October in nine states, up in 11 states and unchanged in four others. Largest month-to-month increases were in Oregon, South Dakota and Washington; largest declines were in Florida, Texas, Arizona, Georgia and Idaho.


Highest prices for the month were in high Federal Milk Marketing Order (FMMO) Class I fluid milk utilization states of Florida and Virginia ($25.80 per cwt) and Georgia ($25.70). Average prices remained below $20 per cwt in Iowa and Wisconsin.

Compared to a year earlier, November 2023’s U.S. average milk price was down $3.70 per cwt, led by a decline of $4.60 or more in Arizona, Iowa, Minnesota and South Dakota. 

Feed prices mixed too

National average costs for major feedstuffs were mixed, with declining corn and dairy-quality alfalfa hay prices offset by a jump in the average price for soybean meal:

  • At $4.66 per bushel, the average price for corn was 27 cents lower than a month earlier and the lowest since January 2021.
  • The average cost of soybean meal (SBM) jumped to $464.27 per ton, up $48.11 from October and the highest since March.
  • The November average price for dairy-quality alfalfa hay was $271 per ton, down $7 from the previous month and the lowest since April 2022.

The DMC feed cost for each month is calculated by summing three numbers: (1) the corn price per bushel times 1.0728; plus (2) the soybean meal price per ton times 0.00735; plus (3) the alfalfa hay price per ton times 0.0137.

November feedstuff prices yielded an average DMC total feed cost of $12.12 per cwt of milk sold, down 4 cents from October and the lowest since November 2021.

Indemnity payments recess

At $9.58 per cwt, the November DMC margin is above the top Tier I indemnity payment trigger of $9.50 per cwt coverage level. There are no indemnity payments for Tier I or Tier II producers at any level.

Looking ahead: Payments and 2024 enrollment

As of Dec. 28, the December DMC margin was forecast at $8.89 per cwt, which would trigger Tier I indemnity payments at $9 and $9.50 coverage levels. That actual margin will be announced on Jan. 31.

At deadline, Progressive Dairy was still awaiting details regarding the 2024 DMC sign-up period. Check the Progressive Dairy website or your local USDA Farm Service Agency (FSA) office for enrollment information when it becomes available.

Past payments

Through Dec. 4, DMC indemnity payments distributed through the USDA’s FSA for milk marketings through the first 10 months of 2023 (January-October) had topped $1.27 billion.

All 2023 DMC indemnity payments are subject to a 5.7% sequestration deduction.

Indemnity payments and average payments per dairy operation in the previous four years were:

  • 2022: $83.7 million, averaging $4,664 – indemnity payments were triggered in just two months (August and September).
  • 2021: $1.187 billion, averaging $62,280 – indemnity payments were triggered in 11 of 12 months.
  • 2020: $234 million, averaging $17,340 – indemnity payments were triggered in five months.
  • 2019: $451.6 million, averaging $19,319 – indemnity payments were triggered in seven months.

Other operating costs mostly lower

Outside of feed – and not factored into DMC margins – other costs were mostly lower.

  • The November index of prices paid for commodities and services, interest, taxes and farm wages was down 0.4% from October 2023 and down 0.3% from November 2022.
  • Machinery costs were down 0.6% from October but up 0.5% from November a year ago.
  • The November fuel cost index was down 6% from the previous month and 17% less than a year earlier.
  • Fertilizer prices rose 2.1% from October but were 26% less than November 2022.

Market cow prices dip

U.S. average prices received for cull cows (beef and dairy, combined) in November averaged $104 per cwt, down $4 from October 2023 but still $25.60 per cwt more than November 2022. It was the lowest average since May.