Episode #5
Episode 25:5 Milk, Markets and Management: A conversation with Dr. Becca Weir.
The question we hear everywhere is simple: when is the milk price going up? The real answer is complicated, and that is exactly why we brought on Dr. Becca Weir, assistant professor of agricultural economics at Penn State, to translate the dairy pricing system into plain language you can actually use. We start with Becca’s path from a Minnesota dairy farm to dairy economics, then compare Minnesota and Pennsylvania dairy production, from regional pockets of farms to the issues producers raise most often. From there we dive into how milk is priced under Federal Milk Marketing Orders, including the four milk classes and the idea of backward induction. Becca breaks down how surveyed wholesale prices for cheese, butter, dry whey, and nonfat dry milk become component prices like protein and butterfat, with make allowances and yield factors shaping the final numbers. Then we shift from price to profitability. Becca makes the case that risk management begins with strong records and a clear cost of production per hundredweight, not a perfect milk price forecast. We also cover two USDA programs that can help manage volatility: Dairy Margin Coverage (DMC), which protects margins using national milk and feed benchmarks, and Dairy Revenue Protection (DRP), which can set a revenue floor tied to your farm. Finally, we touch on her research on DMC participation and why Pennsylvania rates have lagged, plus her work linking net merit genetics to farm profitability. If this helped you think differently about milk pricing, farm financial management, or dairy risk tools, subscribe, share the show with another producer, and leave us a review.
