Milk prices in the USA are rallying; Class III milk futures (manufacturing milk) have rallied, with JUL settling US57¢ higher at $19.69/hundred weight and AUG and SEP closing above US$19.00 cwt for the first time for some time.
However on the profit side of the equation, the situation is not so bright; Dairy farm profitability fell again in May due to record-high alfalfa hay costs. Hay jumped $31/ton to $186/ton, according to USDA’s “Ag Prices” report released this week. The cost of feed to generate 100 lbs of milk hit a new high of $11.15, up 44¢ from April. With an All-Milk price of $19.40, that left “income over feed costs” of $8.25, about 10% below the 10-year average.
It’s great to be producing milk from pasture.