Dairy Margin Coverage Payment Triggered for Third Time in 2026

The Dairy Margin Coverage (DMC) payment was triggered in August due to a low margin of $9.34 per hundredweight, marking the third month an indemnity payment has been issued so far in 2026.

The August all-milk price across major dairy states averaged $19.80 per cwt, down 50 cents from July and $1.10 per cwt from August of last year. South Dakota reported the largest price increase at $1 per cwt, while Florida recorded the largest month-over-month loss at $2.80 per cwt.

Total feed costs rose by nearly a dime in August, with corn prices increasing 19 cents due to revised yield forecasts and weather conditions affecting the Corn Belt. The DMC margin is calculated by summing the prices of alfalfa hay, corn, and soybean meal, which are then multiplied by specific factors.

Looking ahead, feed costs are forecasted to strengthen in upcoming months, with September's DMC margin expected to be $7.78 per cwt due to a milk price of $19.43 per cwt and a feed cost of $11.65 per cwt. The year-end average is predicted to be $9.16 per cwt.