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November 29, 2018

October Dairy Margin Nearly Breaks $9

 |  By: Jim Dickrell

The dairy/feed margin as calculated by the Dairy Margin Protection Program formula came in at $8.98/cwt, the largest margin since December of 2017 when it was $9.36.


Driving the increase was the October all-milk price of $17.40, which is at its highest level since November of last year when it reached $18.10. Feed prices remained pretty much unchanged in October, so the 70¢/cwt increase in the all-milk price was wholly responsible for the 70¢ jump in margin.


The good times, if they can be called that, won’t last very long, however. Class III prices for November are in the low $14 range; Class IV prices in the high $14s.


The United States Department of Agriculture’s  Agricultural Prices report, released today, shows dairy cattle prices are reflecting those lower milk prices. The average price for dairy cows is now just $1,230, down almost $400 per head from a year ago. Eight states in the Midwest and Northeast are reporting dairy cow prices below $1,200 per head. Highest prices for cows are being paid in Arizona and Texas, but those western cows are commanding only $1,450/head.