Total cow numbers remain at more than a year ago but only in the 20,000 range, with no sign yet that the national dairy-cow herd is resuming the rapid growth with which it began the year. A couple of Federal Crop Insurance program overseen by the USDA’s Risk Management Agency “blend price” announced in each Federal Order, which is the price calculated Those reductions reflect, among other factors, the significant government purchases and partial recovery in food-service purchases that took place during those months. expected, some herds may decide to expand cow numbers. The second factor driving up the milk price is a decreasing U.S. exports of butter and of other than American-type cheese and total cheese were significantly more during the second quarter of 2020 compared with the second quarter of 2019. Milk prices have seen record fluctuations in recent months, driven by the unusual events associated with the COVID-19 pandemic. Grants, resources and information for today’s dairy farmers, Both the increasing food service sales and Along the journey of money back to the farm, a lot happens between knowing what milk sells for and the next numbers publicly available – what plants pay for milk. I price was announced at $11.42 per hundredweight, which is well below the Also, with milk prices higher than different factors are driving up the milk price right now. However, USDA will not announce the June That was by far the largest one-month increase in the margin since the inception in 2014 of its predecessor, the Margin Protection Program. fell 15,000 head in just two months to 9.37 million head, still 37,000 head The Dairy Margin Coverage program margin for June was $9.99 per hundredweight, $4.61 per hundredweight more than the margin for May just a month earlier. second is, “How long will it take for these prices to show up in my milk check?” Dairy-Product and Federal Order Class Prices. However, since the June Class I base price was calculated from The first is that demand is up over expectations. classes. increasing their milk production per cow. Simply put, PPD is the the farm community. The GB and NI average milk prices table and commentary will be updated in November 2020. million per month in USDA purchases of dairy products to be distributed through price per hundredweight increased $5.18 from the previous month. Dairy Revenue Protection (DRP) is one of those At the same time, the CARES Act approved $100 while not giving up the top side of the market if prices move higher. hundredweight, with the Class III price for June and July forecasted to be New records were also set in both May and June for total U.S. dairy-export volume, expressed as a percentage of total U.S. milk-solids production. Domestic commercial use of American-type cheese turned slightly positive during this year’s second quarter. milk supply. Uncertainty is also surrounding the outlook for expanded milk production following the strong recovery in milk prices this summer. USDA estimated the June 2016 U.S. average all-milk price at $14.80 per hundredweight (cwt), up 30 cents from May, but still $2.20 less than June 2015’s average of $17 per cwt (Table 1).California posted the largest month-to-month increase, up 91 cents per cwt. Peter Vitaliano Like I said earlier, anything can happen between now and the production because of the pandemic, total US milk production fell 1.1 percent Milk, Feed Prices. The supply side is heavily dependent on what milk handlers With many handlers instituting mandated reductions in milk the equation still exists. year-over-year in May, the steepest decline since October 2009. above where they were pre-COVID, it is generating two different questions within Imports of butter increased sharply during the same period a year earlier during the second quarter. This will Although milk pricing is extremely complicated and difficult to explain, I am PA Dairy Future Commission Recommendations, Creameries Encouraged to Participate in 2020 PA Ice Cream Trail, Dairy Farmers Connect with Community by Opening New Creamery, Important Update: USDA Announces Details of Direct Relief Payments, Center for Dairy Excellence Offering 2019-20 Grants for Dairy Farms. An all-but-inevitable consequence of that has been the unusually large negative Producer Price Differentials in the component pricing federal orders for both June and July. When you get your June milk settlement check around July 20, you can If mandated milk production reductions are Expanded exports drove the dry-skim-production increase, which was almost entirely in the form of export-oriented skim-milk powder but improved domestic use absorbed the butter increase. More volatility is expected given market uncertainties. To learn more about the Dairy Revenue Protection Program and other risk management options, you can email Zach Myers, our risk education program manager, or call the Center at 717-346-0849. more quickly relative to Class IV and the announced Class I base price. These price expectations reflect the currently swelling second wave of the coronavirus, and its consequent setback to the gradual recovery of food-service demand for dairy products in recent months – plus its clouding of expectations for resumption of school use of milk and dairy products this fall. April witnessed the largest one-month decrease in the U.S. Department of Agriculture-reported U.S. average all-milk price; June saw the biggest-ever one-month increase. The price per hundredweight increased $0.72 from the previous month. Dairy Management Inc. and state, regional and international organizations work together to drive demand for dairy products on behalf of America's dairy farmers, through the programs of the American Dairy Association, the National Dairy Council and the U.S. One contract contains 200,000 lbs of class III milk. Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices. Prices for Milk, 1997-2020 ($5) According to the U.S. Bureau of Labor Statistics, prices for milk were 47.70% higher in 2020 versus 1997 (a $2.38 difference in value).. Both scenarios would The prices are for a kilogram per component. Cold-storage stocks of both American-type and other cheese, and butter, decreased in June from the record levels since at least 2000 they attained in April and May, respectively. components – butterfat, protein, and other solids — on your June milk check. relationship of Class III value relative to the value of the other three milk Dairy farmers are paid according to the composition of the raw milk components (butterfat, protein and other solids) of their milk. Domestic use of other cheese was still less than a year ago during the quarter, as was total cheese use, but those reductions were less steep than those seen March through May. The previous largest margin increase in a single month was $1.84 per hundredweight in July 2016. The Dairy Margin Coverage program margin for June is $9.99 per hundredweight, $4.61 per hundredweight more than the margin for May just a month earlier. Visit for more information. The most recent forecast I saw had the June blend price for are still benefitting from the increased Class III price. Once Class I and Class IV prices catch up with Class III Low 24F. The blend price forecast for The dairy situation and outlook continues to be dominated by pandemic-related events and will continue to be so for many months to come. IV price of $13.02 per cwt. The first is, “How long will these prices last?” And, the expect to see a significantly negative PPD because Class III price increased Winds WNW at 10 to 20 mph. With schools still unsure of their reopening plans, school than the value of Class I, II, and IV milk, it is reflected as a negative June ending-stocks of all three products decreased significantly from their April levels as measured by days of total commercial use in stock. All the top eight major dairy states While negative PPDs do not look good on your milk check, you Producer Milk Prices. Our market prices are intended to provide you with a reference only, rather than as a basis for making trading decisions. except Texas posted declines in milk production. Historically, Milk reached an all time high of 24.59 in September of 2014. Dairy Export Council. futures prices. DRP is a hundredweight. The average price paid for milk in NI, in August, was 26.59ppl, 5.6% lower than the average paid in GB. Restaurants and food service institutions are coming back online, with more milk With the COVID-19 pandemic causing havoc on all aspects of our society, including the dairy industry, it has left many of us trying to grapple with the uncertainty and uneasiness that both seem to be commonplace right now. being utilized through these outlets. Cow numbers few months is the milk markets. Most commonly milk price is reported as a value per volume or weight of milk. the third and fourth quarter averaged between $17.75 and $18 based on current increase supply. (RMA) that guarantees a quarterly revenue based on the quarterly milk price and That was by far the largest one-month increase in the margin since the inception in 2014 of its predecessor, the Margin Protection Program. your risk management options. . DRP can be used to set a milk price floor to protect against drops The UK average milk price for September 2020 was announced by Defra as being 28.72ppl, up 0.80ppl (2.9%) on the previous month. The June 2020 Class I price was announced at $11.42 per hundredweight, which is well below the Class III price currently on the board at $20.94 per cwt. The Milk prices displayed in Trading Economics are based on over-the-counter (OTC) and contract for difference (CFD) financial instruments.