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With a USDA extension giving dairy producers several more weeks to enroll in the Dairy Margin Coverage (DMC) and Supplemental DMC programs, many producers are being urged to reevaluate their initial decisions not to sign up for the federally subsidized safety net program in 2022.
The Federal Milk Marketing Order (FMMO) advanced Class I base price hit another eight-year high in March, but the change in the Class I mover formula implemented in 2019 reduced what might have been an even higher price paid to producers.
Continuing a trend started last November, Federal Milk Marketing Order (FMMO) January 2022 uniform milk prices were up while the Class IV milk price impacted handler pooling.
The USDA’s World Ag Supply and Demand Estimates (WASDE) report reduced the 2022 milk production forecast due to lower cow numbers, while raising the projected all-milk price to more than $23.50 per hundredweight (cwt).
Class IV milk prices are riding a high tide, but currents can change. Pick price targets and prepare to take advantage of the markets with available risk management tools.
The USDA announced updates to school nutrition standards that could extend through the 2023-24 school year. Among the provisions, the rule allows schools to continue to serve low-fat (1%) flavored milk with meals without needing to secure a waiver.
Feed prices were up but milk prices rose even more, meaning there will be no Dairy Margin Coverage (DMC) program indemnity payments at any level for December milk marketings.
Milk futures prices increased substantially in early January but then dipped on Jan. 20. The long-term future depends on how producers react when it comes to milk supplies, as well as the relationship between domestic and international dairy product prices, which impact exports. Progressive Dairy provides monthly online updates of important dates and reports affecting risk management decisions.
It took a roller coaster ride to get there, but December 2021 uniform milk prices in Federal Milk Marketing Orders (FMMOs) reached the highest level in more than seven years. Riding the recent wave in milk class prices, more Class III milk was pooled but more Class IV milk wasn’t.
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