February Dairy Margin Falls to $7.91/cwt
The United States Department of Agriculture reported last week that the milk-feed dairy margin was $7.91/cwt, down 19¢/cwt from January. But because the average of the two months came in at $8.01/cwt, there will be no Margin Protection Program (MPP) payments issued for the January-February period.
The February numbers show the national all-milk price dropped 40¢/cwt to $15.70/cwt. Feed costs dropped 21¢/cwt, with corn down 9¢/bu, alfalfa hay down $5/ton and soybean meal down nearly $6/ton.
If MPP payments were based on state prices, Illinois, Michigan, Ohio and Texas would all receive MPP payments. Texas had the lowest milk-feed margin January/February average, at $6.71/cwt. Michigan’s two-month average margin was $7.11, and Illinois and Ohio two-month average margins were $7.81.
Conversely, South Dakota had a two-month, milk-feed margin of $9.95/cwt, based largely on the fact that it’s ration cost averaged $6.95/cwt and it’s all-milk averaged $16.90. Wisconsin’s two-month average margin was $8.92, based on a feed cost average of $7.13 and a milk price average of 16.05.
It’s possible, and likely, that other states fell below the $8 payment threshold as well. But because USDA does not publish corn and alfalfa hay prices for all states, it’s not possible to calculate margins for these states.