Headlines featuring broken records for the Dairy Margin Coverage (DMC) program are beginning to sound like, well, a broken record, but unfortunately, that is the reality as the July income-over-feed cost came in at $3.52 per hundredweight (cwt.). That is down 13 cents from the painfully low record set in June.

The price for corn and premium alfalfa hay used in the calculation actually came down from the month before, landing at $6.22 per bushel for corn and $288 for hay. However, soybean meal went up nearly $30 a ton, reaching $443.15 per ton for July. That brought feed costs to $13.88 per cwt. of milk, which was 37 cents less than the month before. Unfortunately, falling milk prices did their part to more than offset any benefit of reduced feed costs.

The year started off with an All-Milk price of $23.10 per cwt. In July, that price had fallen to its lowest point of the year so far at $17.40. That was 50 cents lower than June’s All-Milk price and a woeful $8.30 per cwt. less than July of 2022.

A margin under $4 means that all farmers enrolled in the DMC program will receive Tier 1 indemnity payments, even those that only opted for the catastrophic level of coverage.