The USDA opened Dairy Margin Coverage (DMC) enrollment for the 2024 Program Year
TODAY, February 28. The enrollment period will remain open until April 29, 2024, with payments retroactive to January milk. Those farms that enroll early could potentially receive a payment on January milk within the next couple of weeks, depending on where the margin falls. As of February 27, the January margin under the DMC Program was forecast at $8.46 per hundredweight, which would provide an indemnity payment of $1.04 per cwt., or just over $800 on a million pounds of production.
What Is Dairy Margin Coverage? Dairy Margin Coverage is a margin-based insurance program authorized by the 2018 Farm Bill and administered by the USDA’s Farm Service Agency (FSA). DMC enrollment for the 2024 program year is open now through April 29, 2024. For farms that have never enrolled in DMC before, it is important to understand that the DMC program is intended to serve as a safety net against volatility in either your milk price or in the price you are paying for your feed. Farms can protect anywhere from a $4 to a $9.50 margin in 50-cent increments.
How Do Producers Sign Up for DMC?Enrollment in the 2024 DMC Program must be done at a local FSA Office today through April 29. Consider calling ahead to schedule an appointment at your local FSA Office. Visit the
DMC webpage to learn more or contact your local
USDA Service Center.
What Do Coverage Levels and Tier I and II Premiums Look Like?View the chart above, and click here to
download a one-pager with more helpful information about the DMC Program. This chart is included on the one-pager. To determine the appropriate level of DMC coverage for a specific dairy operation, producers can also use this
online dairy decision tool.
Since DMC began in 2019, the program has paid out nearly $2.1 billion in indemnities through 2023. At the maximum $9.50 per cwt. margin coverage, indemnities were above the premium level in every year. In 2023, DMC indemnities were the highest, with payments triggered in 11 out of 12 months. Prices in 2023 yielded a record low margin of $6.70 per cwt. average for the year. For those farms covered at the maximum $9.50 margin coverage level, DMC provided a net benefit of $2.50 per cwt. in 2023, or just under $25,000 for every 1 million pounds covered. Looking ahead to 2024, margins projected under DMC are higher than where 2023 ended up. However, the margin does dip below the $9.50 level in January and February. With the unpredictable nature of our commodity markets, nobody knows for sure when indemnity payments will be triggered.
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