COVID-19 is impacting the entire economy and marketplace, including the milk market. We’ll be providing weekly updates with milk futures prices and other market updates to help keep you as knowledgeable as possible during this time. View the entire list of weekly updates.
Class III and IV prices have improved slightly since Tuesday’s market update. Average Class III price over the next 12 months has improved $0.31 to $14.68/cwt since Tuesday with most of the gains coming in the later months. Average Class IV price over the next 12 months has improved $0.25 to $12.54/cwt. Gains in Class IV are spread out through the next 12 months and not a specific set of months.
The USDA is expected to release final rules for direct payments to dairy farmers next week. Based on the initial guidelines suggested by USDA, the average Pennsylvania dairy farm (86 cows with average 20,629# annual production) is estimated to receive around $13,800. This is only an estimate and not guaranteed. Once the final rules are released next week, perhaps better estimates can be made. Initial guidelines suggest direct payments be calculated as 85% of the actual loss in milk price from January 1 to April 15, 2020 plus 30% of the loss in milk price from April 16 to September 30, 2020, with payments capped at $125,000 per farm. However, there were no details on how the actual loss would be calculated. Once rules are released, there will be details on what dairy farmers need to do to sign up to receive the direct payment. Payments are expected to be out in June.
Next Thursday, May 7 from 12 – 1 p.m., the Center will be hosting a fourth COVID-19 dairy industry Q&A conference call. Panelists will include Cynthia Walters, FSA Dairy Program Specialist, Rob Barley, Chair of PMMB, Jud Heinrichs, Professor of Dairy Science at PSU, and John Noullet, Mental Health Care Educator at Philhaven. Find out more information on what the panelists will discuss, how to connect to the call, and how to submit questions in advance of the call.