NMPF Issues Monthly Dairy Report for February

Dairy cooperatives are once again leading efforts to curb milk production growth early this year, as they revive base plans imposed in 2020 to deal with output that grew by nearly 3 percent during last year’s fourth quarter. That’s removed some volatility from markets, with cheese and milk prices settling at relatively stable, but also relatively low, levels as domestic commercial use of milk in all products drop to nearly flat levels of growth and increases in exports also slow.

The Dairy Margin Coverage program margin dropped below the maximum $9.50 per cwt coverage level to deliver a final monthly payment for 2020 of $0.72 per cwt in December, bringing the average payments for the maximum coverage level during all of 2020 to $0.73 per cwt. Payouts under the program, the main federal safety net for dairy producers, are expected for most of this year.

With year-end data now reported, the annual average U.S. all-milk price for 2020 was $18.30 per cwt, 30 cents below 2019. But with the uncharacteristically high level of direct CFAP payments and payment disparities due to the high level of Class III milk de-pooled from federal orders last year, the all-milk price is less reflective of average farmer revenues than typical. Also, the number of licensed U.S. dairies declined to 31,657 in 2020, a decrease of 7.5 percent from the previous year. That is slower than the loss rate in 2019 but still above historical averages.

The full report can be found at:

https://www.nmpf.org/wp-content/uploads/2021/03/Dairy-Market-Report-February-2021.pdf