The all-milk price declined in July according to USDA’s latest Ag Prices report. The all-milk price of US$0.40/l was down 2.8% from the prior month and was 32% lower in YOY terms.

Average MPP farmgate margins fell 3.9% between June and July to $9.10/cwt (a multi-year low), reflecting lower Class III prices (-7.6%) prices and despite flat Class IV prices as well as lower corn and alfalfa hay inputs costs (soybean meal was higher). We expect margins to sharply improve in 2H-23 to near 20 c/kg by the start of Q4.