DAIRY MARKET PRICES

Report for August

The U.S. Department of Agriculture (USDA) reported that the U.S. average all-milk price rose $0.60 from May to $17.30 per hundredweight in June, the first significant monthly increase in milk prices since last December. Modest reductions in grain and hay prices moved the June monthly Margin Protection Program (MPP) feed cost formula calculation down by $0.12 from May to $7.97 per hundredweight. The bimonthly MPP margin for May–June was $8.97 per hundredweight, up $0.02 from the March –April margin. The further easing of the milk production buildup of the past year or so has contributed to lower product stocks, and ultimately to stronger milk prices. The U.S. dairy trade balance during the second quarter increased by the equivalent of a full percentage point of total domestic milkfat production.