The all-milk price declined in June, according to USDA’s latest Ag Prices report. The all-milk price of US$17.90/cwt was down 7.3% from the prior month and 33% lower in YOY terms. Average MPP farmgate margins fell 19.7% between May and June to $4.30/cwt (a 130-month low), reflecting a 7.4% fall in Class III prices and despite higher Class IV prices and lower input costs (corn, soybean meal and alfalfa hay).

We expect gross milk over feed margins to decline further in July before starting a recovery, remaining below $9/cwt for the remainder of the year.