Without approval in the 2023 Farm Bill, the Dairy Margin Coverage program expires at the end of the year.

Milk checks for September production will again reflect stronger protein and Class III milk prices. That will change on October production, with struggling cheese prices weakening the Class III price and widening the Class III-IV price spread, adding substantial Class IV depooling incentives.

Here is a brief look at the news affecting dairy producers during the first week of October 2023.

Compared to a month earlier, U.S. average feed costs were lower and milk prices were up, pushing the milk income margin up almost $3 per hundredweight from July’s historic low.

Lower milk production cut into butter inventories in cold storage in August. The tighter supplies are driving prices higher.

The USDA is announcing a second round of payments for dairy producers through the Organic Dairy Marketing Assistance Program (ODMAP), providing an additional $5 million to help dairy producers mitigate market volatility, higher input and transportation costs, and unstable feed supply and prices that have created unique hardships in the organic dairy industry.

With a federal government shutdown possible, October’s dairy risk management calendar has the potential to be scarier than Halloween.

The Federal Reserve Board’s Federal Open Market Committee (FOMC) voted to maintain the interest rate for federal funds at 5.5%.