Dairy Margin Coverage Program Enrollment Now Open

The U.S. Department of Agriculture has begun accepting applications for the Dairy Margin Coverage program for 2023 enrollment. The safety net program is designed to help producers manage changes in milk and feed prices.

Farm Service Agency Administrator Zach Ducheneaux explained that steps were taken last year to improve coverage, especially for small- and mid-sized dairies, including offering a new Supplemental DMC program and updating its feed cost formula to better address retroactive, current and future feed costs.

"Dairy producers are the backbone of many agricultural communities across rural America," Ducheneaux said. "Dairy Margin Coverage provides critical assistance to our nation's 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."

DMC is a voluntary risk management program that offers protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer.

So far in 2022, DMC payments to more than 17,000 dairy operations have triggered for August for more than $47.9 million. According to DMC margin projections, an indemnity payment is projected for September as well. At $0.15 per hundredweight for $9.50 coverage, risk coverage through DMC is a relatively inexpensive investment.

Signup for the DMC runs through December 9 at the Farm Service Agency. The program a voluntary risk management tool that offers protection to dairy producers when the difference between the all-milk price and the average feed price falls below a certain dollar amount selected by the producer.

Source: USDA