CA: Last Call for the DMC Signup

The sign-up opportunity for the 2019 Dairy Margin Coverage (DMC) program ends on September 20, 2019. USDA reports that as of August 11, only 44% of California’s eligible producers have signed up for the DMC program.

Here is the scoop on the DMC. If you sign up for the full five years of the program at the $9.50 income over feed cost margin, you get a 25% discount off the standard premium rate of $0.15 per cwt. This makes your premium $0.1125 on the 5 million pounds of coverage that is available at the $9.50 level.

If you do that BEFORE September 20, it will cost you $5,625 (50,000 cwts. at 11.25 cents per cwt.) for the first year and for each of the next four years of the program. In exchange, USDA will pay you the difference between the national all milk price and a national feed cost calculation if it is less than $9.50 per cwt.

The way this works is that you divide the 5 million pounds by 365 days, which equals 13,699 pounds per day and then divide by 100 to convert to cwts. That number is multiplied by the number of days in each month and then multiplied by the DMC indemnity payment for the month. USDA will make DMC payments retroactive to January of 2019.

Here is how the math works out: January’s payment to each enrolled producer will be $7,601, February $6,098, March $3,525, April $2,753, May $2,123 and June $3,575 for a total of $25,675 in payments for the first half of 2019.

 

 

While you are at the USDA Farm Service Agency office you can also sign up for the Market Facilitation Program trade mitigation payment. This sign up period extends to December 6, but the sooner you sign up, the sooner you will collect a payment. The payment rate is 20 cents per cwt. on one-half of the production base you established that is used for the Dairy Margin Coverage program. Said another way, it is 10 cents per cwt. on your annual production base. USDA has indicated that if the trade war continues for the rest of the year, there will likely be additional payments.