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The U.S. Department of Agriculture (USDA) has extended the deadline to enroll in Dairy Margin Coverage (DMC) and the new Supplemental Dairy Margin Coverage (SDMC) for 2022. ?The new deadline to apply is March 25, 2022. USDA’s Farm Service Agency (FSA) opened DMC and SDMC signup in December 2021 to help producers manage economic risk brought on by milk price and feed cost disparities.
“Over the past two years, American dairy farmers have faced unprecedented uncertainty, from the ongoing pandemic to protracted natural disasters. As producers continue to manage these interconnected challenges, FSA has tools at the ready to provide critical support,” said FSA Administrator Zach Ducheneaux. “We are encouraging dairy operations to take advantage of the extended deadline and join the 8,969 operations that have already enrolled for 2022 coverage. At 15 cents per hundredweight at the $9.50 level of coverage, DMC is a very cost-effective risk management tool for dairy producers.”
Enrollment for 2022 DMC is currently at 48% of the 2021 program year enrollment. Producers who enrolled in DMC for 2021 received margin payments each month, January through November for a total of $1.2 billion, with an average payment of $60,275 per operation.
The DMC program offers reasonably priced protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production.
Additionally, FSA updated how feed costs?are calculated, which will make the program more reflective of dairy producers’ actual expenses.?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?marketing’s, 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.
For more information, visit the FSA dairy programs webpage, or contact your local USDA Service Center.