Editor's note: This article previously reported that a significant increase in the soybean meal price led to a feed cost of $11.63 per hundredweight (cwt) and resulted in a DMC margin of $9.37 per cwt in April 2025. Upon receiving an update on the soybean meal price, we have revised our calculations and the article to reflect the new feed cost and DMC margin. What you read below is accurate as of June 3, 2025.
The USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report May 30, which includes feed costs and milk prices used to calculate the April Dairy Margin Coverage (DMC) program margins and indemnity payments. April’s margin was $10.42 per hundredweight (cwt) after feed costs were stronger than expected and the milk price fell again, pushing the margin down from March and resulting in the year’s lowest margin yet.
A peek at April DMC
DMC program margin factors compared to the previous month:
- Alfalfa hay: $252 per ton, up $10
- Corn: $4.62 per bushel, up 5 cents
- Soybean meal: $295.03 per ton, down $8.77
- Total feed costs: $10.58 per cwt, up 13 cents
- Milk price: $21 per cwt, down $1
- Margin above feed cost: $10.42 per cwt, down $1.13
Source: USDA Farm Service Agency, National Agricultural Statistics Service and Marketing Service, May 30, 2025
Milk prices drop as demand softens during spring flush
April’s all-milk price of $21 per cwt, down $1 from the previous month, reflects a trend first noticed in March as milk production improved seasonally with the spring flush but coincided with softened consumer demand. Every state in the major 24 dairy states posted month-over-month declines in the all-milk price from March to April, with the smallest being a 30-cent difference in Idaho’s all-milk price ($21.40 to $21.10 per cwt) to the largest spread posted in Utah at $1.70 ($22.10 to $20.40 per cwt).
The announced average all-milk price for the 24 major dairy states in April was up 60 cents from the same period a year ago. The year-over-year comparison varied from state to state with some posting small declines in price to others recording great improvements. Georgia had the greatest year-over-year drop at 80 cents per cwt, while Wisconsin inversely reported the largest improvement up $2 per cwt from April 2024.
Feed costs rally to best month of 2025
By all accounts, the feedstuff prices used to calculate the feed cost for the April DMC margin had their best month yet for 2025. All commodities had a strong month, but both corn and dairy-quality alfalfa hay were the two commodities to rise in price month over month. Here’s a breakdown of each commodity price used to calculate the total feed cost for the DMC margin last month.
- The average cost of corn was $4.62 per bushel, up 5 cents from March and up 23 cents from April 2024.
- Dairy-quality alfalfa hay was $252 per ton, up $10 from the previous month but down $8 from the same month a year ago.
- At $295.03 per ton, April’s price for soybean meal fell $8.77 compared to March’s price and was also down $62.65 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.
As prices rose in April, the feed cost for the month settled at $10.58 per cwt of milk sold. April’s feed cost was up 13 cents from March and the highest for 2025. It was down 32 cents from April 2024.
April’s margin lowest of 2025 so far
The realized DMC margin for April was $10.42 per cwt, tumbling $1.13 from March’s margin and the lowest year-to-date, but not low enough to trigger a payment through the DMC program. The all-milk price is mostly to blame for the tighter margin as feed costs have remained relatively stable despite some individual commodities having a stronger market than others.
Margin predictions for May
The DMC online decision tool forecasts the margin to rebound in May to $11.02 per cwt as feed costs are expected to retreat to the near sub-$10 range and the all-milk price remains relatively unchanged. Current forecasts predict margins to rise and not trigger any more indemnity payments for the remainder of 2025, still ending the year at an average DMC margin of $12.89 per cwt. Although, markets do change.
Enrollment details for the 2025 program were not yet available at the time of this writing.
