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).

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.

Progressive Dairy provides monthly online updates of important dates and reports affecting risk management decisions.

Editor's note: This article has been updated from the original, noting that the DMC hay adjustment payments are subject to a sequestration deduction rate of 5.9% on 2020 payments and 5.7% on 2021 payments. The USDA’s implementation of higher hay prices used in feed cost calculations will have an impact on the largest number of dairy producers participating in the Dairy Margin Coverage (DMC) program.

The USDA has released eagerly awaited details related to the Dairy Margin Coverage (DMC) program. The announcement, Dec. 8, covers:

• Creation of a supplemental DMC provision for small and midsized dairy producers to update milk production history
• Adjustments in determining average hay prices to calculate monthly feed costs and margins
• Establishment of a sign-up period for 2022 program enrollment

A few questions remain, but here’s what we know so far. Check back with Progressive Dairy for updates.