Review upcoming DMC and DRP deadlines during the monthly webinar
“Although milk prices are down compared to a couple months ago, they are not as volatile as they were. Retail dairy product sales, on average, are still experiencing year-over-year growth while food service sales continue to grow as people start to eat out more. Exports remain robust and are clearing a lot of excess milk supply,” Myers shared. “All of these factors are helping to bolster milk prices and reduce volatility, and I plan to discuss them in more detail during the webinar on September 23. Knowing this type of real-time market data can help dairy professionals make informed decisions on the farm.”
- Class III price for October and November are trading considerably better than last month at $19.21 and $17.69 per hundredweight, respectively, based on milk futures prices from September 14, 2020. The current October price is $2.39 higher than last month, and current November price is $0.97 per cwt higher than last month.
- Class IV average milk futures prices for the next 12 months are also up 11 cents per cwt compared to the beginning of August. September Class IV price is $12.68 per cwt, 52 cents lower than last month’s September price. The rest of the months are trending up now versus last month, resulting in a 12-month average price of $14.84 compared to $14.73 this time last month.
In addition, Myers will share upcoming deadlines for enrolling in risk management programs like Dairy Margin Coverage and Dairy Revenue Protection. The July Dairy Margin Coverage margin was announced as $12.41, well above the highest margin coverage of $9.50. The U.S. all-milk price was $20.50, and the feed cost part of the equation was $8.09 per cwt compared to last month’s $18.10 milk price and $8.11 per cwt feed price. On September 11, the USDA projected an August margin of $10.87, but September was projected at $9.05, which would trigger a $0.45 per cwt payment if current projections become reality. DMC enrollment for the 2021 year will open on October 12 and end December 11, 2020.
“Another risk management option is Dairy Revenue Protection. DRP policies are now available to set floor prices for the first quarter 2021 to first quarter 2022. DRP premiums continue to be expensive relative to what they were prior to the COVID-19 market disruption, but they still may be an option for some dairies to lock in their cost of production,” Myers said. “If you’ve never had a risk management plan and want more information about these programs, now is the time to start thinking about it. I am here to help you figure out what is best for your operation.”
For dairy professionals who want to join the risk management discussion and access this information digitally, the Center offers the series in webinar format. There is no cost to participate in the monthly ‘Protecting Your Profits’ webinar, and no registration is necessary.
Visit www.centerfordairyexcellence.org/SeptemberPYP on Wednesday, September 23 at noon to launch the webinar. Individuals who would prefer to connect via conference call can dial the following number:
Meeting ID: 848 3416 1708
Join the Center on September 23 to find out how these programs and the conventional price risk management tools can fit in to your marketing plan. For more information, call 717-346-0849 or email Myers at firstname.lastname@example.org. The webinar will start promptly at noon and last approximately 15 minutes. They are recorded and posted on the Center for Dairy Excellence website for those who are unable to join the live session.