The USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report April 30, which includes feed costs and milk prices used to calculate the March Dairy Margin Coverage (DMC) program margins and indemnity payments. March’s margin was $11.55 per hundredweight (cwt), the result of a relatively stable feed cost but sinking all-milk price as then-talks of a looming trade war pressured the export market while domestic consumer spending cooled at the same time.
A peek at March DMC
DMC program margin factors compared to the previous month:
- Alfalfa hay: $242 per bushel, down $1
- Corn: $4.57 per bushel, down 1 cent
- Soybean meal: $303.80, down 98 cents
- Total feed costs: $10.45 per cwt, down 3 cents
- Milk price: $22 per cwt, down $1.60
- Margin above feed cost: $11.55 per cwt, down $1.57
Source: USDA Farm Service Agency, National Agricultural Statistics Service and Marketing Service, April 30, 2025
Milk prices fall with concerns over international, domestic demand
Throughout the month of March, milk prices were mixed as the markets first reacted to looming trade wars and U.S. consumer spending showed some fatigue, but then all seemed to flatten by the end of the month. Every state in the 24 major dairy states posted month-over-month declines in the all-milk price from February to March. The Upper Midwest states of Iowa and Minnesota recorded the largest price drop at $2.30 per cwt and $2.10 per cwt, respectively. The spread in price declines varied with Florida posting the smallest fall of 90 cents to $26 per cwt in March.
The announced average all-milk price for the 24 major dairy states in March was $22 per cwt, down $1.60 from the month prior but rising $2 from March of last year. Despite month-over-month declines, all but one of the 24 major dairy states saw the all-milk price climb year over year. For the second consecutive month, Wisconsin recorded the greatest year-over-year gain at $2.60 per cwt. Oregon was the sole state to post a decline in March 2025 from the year prior, down 40 cents.
Feed costs remain stable through March
Unlike the drop noticed in the all-milk price, all feedstuff prices used to calculate the feed cost for the DMC margin in March remained relatively unchanged. The largest spread was in dairy-quality alfalfa with a $1 decline from the month prior. Here’s a breakdown of each commodity price used to calculate the total feed cost from the DMC margin last month.
- The average cost of corn was $4.57 per bushel, down 1 cent from the month prior but up 21 cents from March 2024.
- Dairy-quality alfalfa hay was $242 per ton, down $1 from February and down $29 from the same month a year ago.
- At $303.80 per ton, March’s price for soybean meal fell 98 cents compared to February’s price and was down a staggering $58.37 from this time last year.
The DMC feed cost each month is calculated 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.
With feed prices largely unchanged, the feed cost for March was $10.45 per cwt of milk sold. March’s feed cost was down 3 cents from February and down 60 cents from March 2024.
March’s margin remains $2.05 above trigger point
The realized DMC margin for March was $11.55 per cwt, falling $1.57 from February’s margin but remaining $2.05 above the $9.50 per cwt top coverage level in Tier I. While the trend for 2025 so far has been a tighter margin each month, March’s prices will result in another month of no indemnity payments.
As of March 3, 73% of all dairy operations with established production history were enrolled in the 2024 DMC program. Those 15,716 operations received a collective $36.7 million in payments with each operation collecting an average of $2,333. This value does vary based on production history as well as the selected coverage percentage and coverage level under the program. Enrollment details for the 2025 program were not yet available at the time of this writing.
Margin predictions for April
The DMC online decision tool forecasts the margin to shrink to $11.14 per cwt in April, likely the result of trade wars that have caused the grain markets, particularly corn, to yo-yo as the all-milk price is expected to drop another $1. Current forecasts still predict margins to not trigger any indemnity payments throughout the remainder of 2025, with the year ending at an average DMC margin of $12.14 per cwt. Although, markets do change.
