Dairy Margin Coverage Available, with New Program Expansion

Brian GermanDairy & Livestock, Industry

Dairy Margin Coverage

The U.S. Department of Agriculture (USDA) has opened the signup period for the Dairy Margin Coverage (DMC) program. Producers will be allowed to enroll in the important safety-net program through February 18, 2022. The program has been expanded to provide dairy producers with more coverage, allowing for enrollment for supplemental protection. Adjustments were also recently made to feed cost calculations to better align the program with actual producer expenses.

The new Supplemental DMC is intended to provide better assistance options for small and mid-sized dairy operations. A total of $580 million will be supporting the Supplemental DMC for dairy farmers that have increased production but have yet been able to enroll the additional production in the DMC program. The supplemental coverage will be applicable to calendar years 2021, 2022, and 2023. Eligible dairy operations with less than five million pounds of established production history will have the opportunity to enroll supplemental pounds in the program.

DMC provides the dairy industry with risk management coverage which enables payments to producers when certain market triggers are met.  DMC payments have been triggered for more than $1 billion between the months of January and October of this year. To enroll in the program producers will need to prove their operation is commercially marketing milk, fill out all necessary paperwork, and pay for the administrative fee.

“Dairy Margin Coverage is a critical safety-net for producers, and catastrophic coverage is free. These DMC updates build on other efforts of the Biden-Harris Administration to improve DMC and other key USDA dairy programs,” Under Secretary for Farm Production and Conservation Robert Bonnie said in a press release. “We encourage dairy producers to make use of the support provided by enrolling in supplemental coverage and enroll in DMC for the 2022 program year.” 

USDA has also been issuing payments for dairy producers enrolled in 2020 and 2021 coverage. With updated cost calculations, additional support of more than $12 million was provided for dairy producers in California. The payments will be retroactive to January 1, 2020, and operations with 2020 and 2021 contracts will be paid automatically for the applicable months. 

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Brian German

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Ag News Director, AgNet West