LUBBOCK, Texas (RFD News) — Dairy producers face tighter margins heading into fall as weaker milk prices meet rising feed, fuel, and financing costs. The Dairy Margin Coverage margin fell to $9.93 per hundredweight in July, down 95 cents from June.
The all-milk price declined 80 cents to $20.30 per hundredweight, while Dairy Margin Coverage feed costs increased 15 cents to $10.37. Soybean meal averaged $337.96 per ton, up sharply from a year earlier, while corn averaged $4.26 per bushel.
The report (PDF Version) says rising corn and soybean meal futures could push feed costs toward $12 per hundredweight during the final three months of 2026. It projects margins falling below the $9.50 maximum payment threshold from September through December.
Producers are also facing diesel prices above $6 per gallon, increasing hauling and on-farm costs. Higher interest rates and a volatile bond market could further raise the cost of capital.
Milk prices are expected to remain relatively steady, leaving feed and operating expenses as key pressure points through year-end.
