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 continue to improve relative to last Friday. As of 1 p.m. on Tuesday, May 5, the 12-month Class III average is up $0.63 to $15.31 per cwt compared to Friday, May 1. Average 12-month Class IV price has increased $0.26 to $12.54 per cwt. This is a short period of time to think that markets are rebounding, but it is at least encouraging that Class III prices, on average, have increased for the last two weeks and Class IV for the last week. Hopefully, current trends will continue as states across the nation begin to slowly reopen their economies this month.
The March Dairy Margin Coverage (DMC) margin was announced last week as $9.15 per cwt. This is the first month in seven months that the DMC margin has fallen below the highest insurable $9.50 margin and triggers an indemnity of 35 cents per cwt for any dairy enrolled at the 95% volume, $9.50 per cwt margin coverage. This represents an expected payment of about $280 per 1 million pounds of production history covered up to 5 million pounds. Based on May 1 closing prices, DMC margins are projected to be below the $9.50 trigger through July of 2021.
Lastly, as of Monday, May 4 at 12 p.m., the Small Business Association is accepting new applications for Economic Injury Disaster Loans (EIDL) from agriculture operations only. More information about EIDL and online applications can be found at sba.gov/page/disaster-loan-applications. Funds are not expected to last long. If interested, submit the application as soon as possible.