Pennsylvania’s dairy farmers are largely weathering the pandemic but could take steps to shore up their finances, according to a new report from the Center for Dairy Excellence.
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The monthly margin under the Dairy Margin Coverage (DMC) program dropped by $3.09 per cwt in November to $8.78 per cwt in December, mostly driven by lower milk prices, generating payments to producers under the USDA’s flagship risk-management program.
The all-milk price declined by $2.80 per cwt for the month, mostly because of a substantially lower December cheese price. The DMC margin was further lowered by a $0.29 per cwt boost in the feed cost added to it. On a per hundredweight of milk basis, the higher feed cost consisted of cost increases of 19 cents, 7 cents and 3 cents for corn, soybean meal, and alfalfa hay, respectively.
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(SPRINGFIELD) The USDA reports that enrollment by dairy farmers into its dairy risk management programs indicates they are proactively managing their risk. In fact, nearly three-quarters of all U.S. Dairy operations with established production history are enrolled in the Dairy Margin Coverage (DMC) program for 2021. Compared with 2020 enrollment of 13,532 operations, participation for 2021 increased to cover nearly 18,500 operations nationwide. While approximately 3,000 operations purchased additional protection under Dairy Revenue Protection (DRP), which covers 30 percent of the milk supply, at least 200 producers purchased coverage through the Livestock Gross Margin for Dairy Cattle (LGM) as well.
Dairy was a tight market to begin with, Martin said. Having to turn around and make everything for the consumer side was difficult. We ve never seen such rapid and devastating change as at the beginning of COVID, Pennsylvania Department of Agriculture spokesperson Shannon Powers said.
Powers added that the industry is witnessing several farmers added in-demand products such as yogurt. The ability to pivot and change directions has been vital for survival. When the pandemic hit, it was a bombshell, Luke Brubaker of Brubaker Farms in Mount Joy said. Schools were a big thing. It took heart out of the industry.”