The USDA National Agricultural Statistics Service (NASS) released its Agricultural Prices report Sept. 30, which includes feed costs and milk prices used to calculate the August Dairy Margin Coverage (DMC) program margins and indemnity payments. August’s margin was $11.52 per hundredweight (cwt) as a result of corn prices falling more than a quarter and milk prices rising a dime.
Dairy margins through August rose month over month as milk prices were mixed throughout the month, but feed costs diverged as corn reached new contract lows during the beginning of the month, and soybean meal prices were influenced by the optimistic USDA World Agricultural Supply and Demand Estimates (WASDE) report. Varying prices eventually gave way to a bump in the August DMC margin.
A peek of August DMC
DMC program margin factors compared to the previous month:
- Alfalfa hay: $222 per ton, down $23
- Corn: $3.96 per bushel, down 33 cents
- Soybean meal: $284.36 per ton, up $25.26
- Total feed costs: $9.38 per cwt, down 48 cents
- Milk price: $20.90 per cwt, up 10 cents
- Margin above feed cost: $11.52 per cwt, up 58 cents
Source: USDA Farm Service Agency, National Agricultural Statistics Service and Marketing Service, Sept. 30, 2025
All-milk price remains relatively unchanged
August’s average all-milk price was $20.90 per cwt, up 10 cents from July, but not nearly the rebound back to prices observed earlier in the year. It was also $2.70 per cwt below the average all-milk price recorded in August 2024.
In the 24 major dairy states, 13 states reported no change or a small increase in the all-milk price from July to August. Texas led the pack with a 70-cent rise month over month to $20.90 per cwt, while Colorado, Indiana and Pennsylvania remained unchanged at $20.20 per cwt, $22 per cwt and $21.30 per cwt, respectively. The remaining states saw declines of up to 60 cents in Washington at $21.10 per cwt. While some states experienced larger swings in the all-milk price through August, most saw the pendulum move by a dime either as a gain or a loss.
The year-over-year comparison on a state-by-state basis was similar in August to the price differences report in July. Oregon reported the largest price difference, down $4.10 per cwt in August compared to the same time a year ago, while Georgia reported the smallest at $1.70 per cwt less than August 2024.
Feed costs remain mixed for August
Corn continued its steep fall in price through August – reaching contract lows during the first half of the month and influencing the month’s feed cost of $9.38 per cwt, down 48 cents from July. Luckily, the price of soybean meal gained some traction after July’s price reached a record low under the DMC program calculations, which helped cushion the blow from the corn markets.
Here's a breakdown of each commodity price used to calculate the total feed cost for the DMC margin in August:
- The average cost of corn was $3.96 per bushel, down 33 cents from July but up 12 cents from August 2024.
- Dairy-quality alfalfa hay was $222 per ton, down $23 from the previous month and also down $14 per ton from the same time last year.
- At $284.36 per ton, August’s price for soybean meal buoyed $25.26 from July’s price, but was $59.04 per ton below August 2024’s price of $343.40 per ton.
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.
The feed cost for August came in at $9.38 per cwt, down 48 cents from the month prior. Commodity markets used to calculate feed costs in the DMC program have not seen values this low since October 2020 when the feed cost was recorded at $9.23 per cwt. The cost was $9.88 per cwt this time last year.
August’s margin rebounds 58 cents
The realized DMC margin for August was $11.52 per cwt, 58 cents greater than July’s $10.94 per cwt as feed costs reached its lowest since 2020, and the all-milk price held relatively steady. As has been the case for all of 2025, the margin does not trigger any indemnity payment for the month.
Margin forecasts for September
The DMC online decision tool forecasts the September DMC margin falling back to $10.63 per cwt as of Sept. 30. The realized margin will be announced Oct. 31. The remaining months of 2025 are predicting margins in the $10 range with the lowest reaching $10.03 per cwt in November. If these forecasts are realized, the 2025 average DMC margin will be $11.15 per cwt. Although, markets do change.
Enrollment details for the 2026 program were not yet available at the time of this writing.
