The USDA National Agricultural Statistics Service (NASS) Ag Prices report, released Jan. 30, established December 2025 Dairy Margin Coverage (DMC) program calculations. Both feed costs and the milk price fell month over month for a DMC margin of $9.42 per hundredweight (cwt), triggering the first and only payment in 2025.
December numbers
The Ag Prices report showed prices for major dairy feedstuffs were mixed, with milk prices stumbling (see Table 1).
December DMC at a glance
DMC program margin factors for December 2025 compared to a month prior were as follows:
- Dairy alfalfa hay: $211 per ton, down $5
- Corn: $4.10 per bushel, up 12 cents
- Soybean meal: $311.93 per ton, down $18.94
- Total feed costs: $9.58 per cwt, down 8 cents
- Milk price: $19 per cwt, down 70 cents
- Margin above feed cost: $9.42 per cwt, down 62 cents
Milk prices mixed across states
December milk prices were mixed across the 24 major dairy states compared to November’s prices. However, every state posted a steep year-over-year decline (Table 2).
The December 2025-announced U.S. average all-milk price was $19 per cwt, down 70 cents from the month prior. Arizona, California, Colorado, Florida, Georgia, Indiana and Virginia posted incremental increases from up 10 cents to up $1.50 per cwt. States with the largest decrease in price were Minnesota, down $1.80 per cwt; South Dakota, down $1.70 per cwt; Idaho, down $1.40 per cwt; and Wisconsin, down $1.30 per cwt.
Compared to the same month a year ago, December 2025’s U.S. average all-milk price was down $4.30 per cwt, with declines exceeding $5 in Arizona, Colorado, Idaho, Kansas, New York, Pennsylvania, Texas, Vermont and Washington.
Calculating margins
December’s feed cost fell slightly with most major feedstuffs used to calculate the monthly feed cost also falling month over month. Corn rallied 12 cents to be the only price improvement.
The DMC feed cost for each month is calculated by 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 those feed cost factors and the U.S. average all-milk price, an 8-cent indemnity payment – the first and only payment of the year – was triggered for producers enrolled under the DMC Tier I coverage level of $9.50 per cwt. All payments are subject to a 5.7% sequestration deduction. At the time of this writing, there was no word on when a producer could expect to see payments.
Looking ahead
The margin forecast for 2026 looks bleak with the latest price predictions updated as of Jan. 30. January’s margin is anticipated to be $7.57 per cwt, $1.93 below the $9.50 per cwt trigger level. If January’s figures hold true, it will be the lowest margin since August 2023. Current forecasts for the 2026 program year indicate margins will remain below the Tier I $9.50 per cwt coverage level through July.
Markets will change, but the forecasts favor participating in the DMC program in the year ahead. Enrollment for the 2026 coverage year ends Feb. 26. (Read: 2026 Dairy Margin Coverage enrollment underway, payments predicted)
