July MILC Payment $1.64/cwt

September 1, 2012 05:51 AM

USDA has announced the July Milk Income Loss Contract (MILC) payment is $1.64/cwt, up 27¢ from June.

The payment rate is based on a $22.40 trigger price, which was adjusted upward $5.46 due to sky-high feed costs. Both the feed cost adjustor and trigger price are the highest ever calculated.

The University of Wisconsin estimates that the August MILC payment will be $1.42/cwt, based on current futures markets. But the payment will likely drop to zero in September because the feed rate adjustor basis jumps to $9.50 from the current $7.35, and the payment ration drops from 45% to 34%.

For more detail on the MILC program, click here.

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