Secure Your Dairy's Future with DMC

By Andi Anderson

The U.S. Department of Agriculture (USDA) is urging dairy producers to sign up for the 2024 Dairy Margin Coverage (DMC) program by April 29, 2024. DMC serves as a crucial safety net program, helping to mitigate the differences between milk and feed prices. Enrollment for this year's DMC began on February 28, 2024, with retroactive payments starting from January and continuing into March 2024.

John Patterson, the USDA Farm Service Agency (FSA) State Executive Director in Ohio, emphasizes the importance of this program, especially given the current economic climate. With DMC, producers can secure risk protection at a reasonable cost, helping to safeguard their operations against market volatility.

For 2024, the FSA has introduced revisions to the DMC regulations. These include extending coverage for the entire calendar year, retroactive to January 1, 2024, and providing adjustments to the production history for dairy operations with less than 5 million pounds of production. Additionally, smaller dairy operations can establish adjusted base production history through DMC, reflecting their current production.

Dairy producers have various options for coverage levels under DMC, including a free option with a $100 administrative fee. Producers who qualify as limited resource, beginning, socially disadvantaged, or military veterans are eligible for a waiver of the administrative fee.

The 2018 Farm Bill extension mandated these regulatory changes to the program, ensuring its authorization through calendar year 2024. DMC payments are calculated based on updated feed and premium hay costs, offering more accurate reflections of dairy producer expenses.

DMC serves as a voluntary risk management program, providing protection to dairy producers when the margin between the all-milk price and average feed price falls below a certain dollar amount chosen by the producer. In 2023, DMC payments were triggered in 11 months, including two months where the margin fell below the catastrophic level of $4 per hundredweight.

USDA also offers additional risk management tools for dairy producers, such as the Dairy Revenue Protection (DRP) plan and the Livestock Gross Margin (LGM) plan, both offered through the Risk Management Agency. Producers are encouraged to contact their local crop insurance agent for further information.

For more details on DMC and enrollment procedures, dairy producers can visit the DMC webpage or reach out to their local USDA Service Center.

Photo Credit: USDA