Natzke dave
Editor / Progressive Dairy

Federal Milk Marketing Order (FMMO) “mailbox” prices averaged about 96 cents per hundredweight (cwt) less than announced average “all-milk” prices in January. It was the widest monthly spread since November 2022:

  • January 2024 U.S. all-milk prices averaged $20.10 per cwt, down 50 cents from December 2023. All-milk prices are reported monthly by the USDA National Ag Statistics Service (NASS). The all-milk price is the estimated gross milk price received by dairy producers for all grades and qualities of milk sold to first buyers, before marketing costs and other deductions. The price includes quality, quantity and other premiums, but hauling subsidies are excluded.
  • The January 2024 mailbox prices for selected FMMOs averaged $19.14 per cwt, down 60 cents from December. The mailbox price is the estimated net price received by producers for milk, including all payments received for milk sold and deducting costs associated with marketing. Prices for milk in areas not regulated under the FMMO system are not included. Mailbox prices are reported monthly by the USDA’s Agricultural Marketing Service (AMS) and generally lag all-milk price announcements by a month or more.

As Progressive Dairy notes each month, there’s a disclaimer of sorts. The price announcements reflect similar – but not exactly the same – geographic areas (Table 1). Also, within states and FMMOs, individual milk handlers and cooperatives may include a wide range of “market adjustment factors” impacting producer-member mailbox prices.

The difference in the two announced prices can affect individual dairy risk management results.

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