Dairy Margin Coverage Signup Now Open

Dairy producers are now able to sign up for the USDA’s Dairy Margin Coverage (DMC) program.

The DMC program enables producers to get coverage through the safety-net program for another year. The USDA also expanded the program to allow dairy producers to get additional assistance through a new Supplemental DMC.

“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. “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.” 

Supplemental DMC

Supplemental DMC will provide $580 million to help small- and mid-sized dairy operations that have increased productions over the years but were not able to enroll the additional production. From the USDA:

“Eligible dairy operations with less than 5 million pounds of established production history may enroll supplemental pounds based upon a formula using 2019 actual milk marketings, which will result in additional payments. Producers will be required to provide FSA with their 2019 Milk Marketing Statement.

“Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023. Participating dairy operations with supplemental production may receive retroactive supplemental payments for 2021 in addition to payments based on their established production history.

“Supplemental DMC will require a revision to a producer’s 2021 DMC contract and must occur before enrollment in DMC for the 2022 program year. Producers will be able to revise 2021 DMC contracts and then apply for 2022 DMC by contacting their local USDA Service Center.”

DMC 2022 Enrollment

According to the USDA, “After making revisions to 2021 DMC contracts for Supplemental DMC, producers can sign up for 2022 coverage. DMC provides eligible dairy producers with risk management coverage that pays producers when the difference between the price of milk and the cost of feed falls below a certain level.”

To be eligible, producers must certify that the operation is commercially marketing milk. They also must sign all required forms and pay a $100 administrative fee, which is waived for farmers who are considered limited resource, beginning, socially disadvantaged, or military veterans.

The signup period for DMC 2022 enrollment runs from Dec. 13, 2021, to Feb. 18, 2022. Producers can use the online dairy decision tool to determine the appropriate level of DMC coverage.

Updates to Feed Costs

The USDA is also changing the DMC feed cost formula for high-quality alfalfa hay. The Farm Service Agency will calculate payments using 100% premium alfalfa hay rather than 50% to more accurately reflect dairy producer expenses.

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