USA: Dairy Farmers May Face Another Year of Depressingly Low Milk Prices
Source: The DairyNews
Despite the Dairy Margin Protection (DMC) program providing significant assistance to many farmers in 2023, the prospects for 2024 are not looking promising.
Farms producing less than 5 million pounds for the first 10 months of 2023 received payments under the program. However, the current low milk prices are not triggering substantial payments. The November income over feed price reached $9.58, the highest since December 2022, but it did not result in a DMC payment for that month.
There is uncertainty regarding the signup for 2024, and any hope for raising the DMC cap from 5 million pounds to 7 million or 8 million pounds appears unlikely with the farm bill extension.
The price disparity between cheese and butter continues, maintaining a substantial premium of Class IV over Class III. This trend is expected to persist, with Class IV futures holding a premium throughout the year. The domestic demand for butter remains strong, offsetting the decrease in international markets.
However, butter exports were significantly lower in 2023 compared to 2022, experiencing a 47.7% decline year-to-date. Despite reaching a new price record in October, butter prices are anticipated to stabilize, possibly entering a sideways pattern similar to the first half of the previous year. Active churning and ample cream supply should ensure sufficient butter supply to meet demand without concerns over shortages.
There is uncertainty regarding the signup for 2024, and any hope for raising the DMC cap from 5 million pounds to 7 million or 8 million pounds appears unlikely with the farm bill extension.
The price disparity between cheese and butter continues, maintaining a substantial premium of Class IV over Class III. This trend is expected to persist, with Class IV futures holding a premium throughout the year. The domestic demand for butter remains strong, offsetting the decrease in international markets.
However, butter exports were significantly lower in 2023 compared to 2022, experiencing a 47.7% decline year-to-date. Despite reaching a new price record in October, butter prices are anticipated to stabilize, possibly entering a sideways pattern similar to the first half of the previous year. Active churning and ample cream supply should ensure sufficient butter supply to meet demand without concerns over shortages.
Key News of the Week
