The enrollment period for the Dairy Margin Coverage (DMC) Program is now open for dairy producers. The safety net program from the U.S. Department of Agriculture (USDA) provides support for producers in navigating changes in milk and feed costs. Dairy producers will have until December 9 to enroll in 2023 coverage. Producers have the ability to use the online decision tool to determine the appropriate level of coverage for their operation.
“Dairy producers are the backbone of many agricultural communities across rural America,” Farm Service Agency (FSA) Administrator Zach Ducheneaux said in a press release. “Dairy Margin Coverage provides critical assistance to our nation’s small- and mid-sized dairies, helping make sure they can manage the numerous and often unpredictable uncertainties that adversely impact market prices for milk. This year showed why enrolling in DMC makes good business sense. Early in the year, some economists predicted that DMC would not trigger any payments for the calendar year, but then fast forward to now, when we’re starting to see payments trigger and a return on investment.”
FSA also began offering improved coverage for smaller operations last year through the new Supplemental DMC program. Nearly $43 million in payments were made to small- and mid-sized dairy operations through the Supplemental DMC program last year. Operations with less than five million pounds of established production history are eligible to enroll supplemental pounds for 2023. The agency also updated the feed cost formula to better reflect market conditions.
The National Milk Producers Federation (NMPF) is encouraging dairy producers to enroll in maximum coverage under the DMC. As higher costs take their toll on overall dairy margins, the risk management provided through DMC becomes even more important. “By calculating assistance via a margin rather than a target price, DMC offers a measure of protection against the current cost volatility that’s challenging many milk producers,” NMPF President and CEO Jim Mulhern said in a statement.
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