The USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report June 27, which includes feed costs and milk prices used to calculate the May Dairy Margin Coverage (DMC) program margins and indemnity payments. May’s margin was $10.41 per hundredweight (cwt), only a 1 cent decline from April’s margin and the result of movements in the all-milk price and feed costs that largely offset each other.
A peek at May DMC
DMC program margin factors compared to the previous month:
- Alfalfa hay: $277 per ton, up $25
- Corn: $4.64 per bushel, up 2 cents
- Soybean meal: $288.75 per ton, down $6.28
- Total feed costs: $10.89 per cwt, up 31 cents
- Milk price: $21.30 per cwt, up 30 cents
- Margin above feed cost: $10.41 per cwt, down 1 cent
Source: USDA Farm Service Agency, National Agricultural Statistics Service and Marketing Service, June 27, 2025
Milk prices rebound after months of decline
May’s all-milk price of $21.30 per cwt, up 30 cents from April, is the first time since January that the prices have risen month over month. However, in the 24-major dairy states, the results were mixed. Fourteen of the major dairy states recorded an increase in the all-milk price, with California and Minnesota posting the largest increases (both up 90 cents) to $20.50 and $21.90 per cwt, respectively. Florida and Georgia posted the largest decreases to the all-milk price in May, down $1.10 and $1.20 per cwt, respectively, for both to settle at $23.80 per cwt. Texas was the only state where the all-milk price remained unchanged from the previous month.
The announced all-milk price for the 24 major dairy states in May was down 70 cents from the same month a year ago. The year-over-year comparison on a state-by-state basis reflected a similar trend, but with changes ranging from a $1.50-per-cwt decrease in Washington to a 30 cent-per-cwt decrease in Ohio. The all-milk price remained unchanged year over year in California.
Feed costs rise despite headwinds for soybean meal
Soybean meal faced some headwinds in May as the price dropped, but the remaining feedstuffs used to calculate the feed cost for the May DMC margin continued to rise following annual highs recorded just a month prior. Here’s a breakdown of each commodity price used to calculate the total feed cost for the DMC margin in May.
- The average cost of corn was $4.64 per bushel, up 2 cents from the month prior and up 13 cents from May 2024.
- Dairy-quality alfalfa hay was $277 per ton, up $25 from the previous month and up $1 from the same month a year ago.
- At $288.75 per ton, May’s price for soybean meal fell $6.28 compared to April’s price and was also down $99.90 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 pricing mostly rising in May, the feed cost for the month settled at $10.89 per cwt of milk sold. May’s feed cost was up 31 cents from April and the highest since June 2024. However, the feed cost was down 59 cents from the same month last year.
May’s margin relatively unchanged from April
The realized DMC margin for May was $10.41 per cwt, just 1 cent lower than April’s margin and the smallest margin of 2025. Despite the continued downward trend in income over feed costs, May concludes another month where the margin does not trigger a payment through the DMC program. The all-milk price showed some strength for the first time since March, and feed costs had a slow start before finishing out the month strong, leading to this month’s DMC margin.
Margin predictions for June
The DMC online decision tool forecasts the June margin to settle at $11.55 per cwt. After April and May’s low margin and February igniting that decline, June’s forecast may be the turning of a page for the remainder of 2025 as margins are expected to climb each month and end the year in the $13-per-cwt range. Although, markets do change.
Enrollment details for the 2025 program were not yet available at the time of this writing.
