Markets & Management

If you haven’t been paying
attention to the grain markets over the past few weeks, it’s time to
tune in. December corn prices are trading around $4 per bushel –
near life-of-contract lows – while soybean meal prices are still hanging
below $300 per ton. These lower grain futures are pushing 2025
and 2026 feed costs based on the Dairy Margin Coverage (DMC) calculations
down to the lowest levels since 2020. In an environment
where milk prices – Class III, in particular – are struggling to find
stronger footing, lower feed costs should help dairies maintain margin.
In fact, DMC margin estimates for the remainder of 2025 and
2026, based on mid-August futures, point to better than $11 per
hundredweight margins. If realized, that would mark three consecutive
years of $11+ margins and would almost certainly encourage
further milk supply expansion.

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