The 2018 Farm Bill authorized the new Dairy Margin Coverage (DMC) program, which is a voluntary risk management program for dairy producers. DMC replaces the Margin Protection Program for Dairy (MPP-Dairy).
DMC continues to offer 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.
Enrollment for the 2021 DMC program year starts Tuesday, Oct. 13, 2020 and runs through Dec. 11. 2020
Decision Tool – The current version of the DMC decision tool has been enhanced and was developed in partnership with in cooperation with representatives from the University of Minnesota and University of Wisconsin to help producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net.
The weekly Dairy Margin Coverage (DMC) Enrollment, Production and Payment report will be updated every Monday at 2:00 PM Eastern.
Program at a Glance
The program provides:
Benefits
At a milk margin minus feed costs of $9.50 or less, DMC payments are possible depending on the level of coverage chosen by the dairy producer.
For the 2020 DMC program year, payments have triggered for March, April, May and September.
For the 2019 DMC program year, payments triggered in January, February, March, April, May, June and July.
Who is Eligible?
To be eligible for DMC, a dairy operation must:
Dairy operations may consist of one or more dairy producers who are in the business of commercially producing and marketing milk as a single unit.
Dairy producers who are members of the dairy operation must share in the risk of producing milk and make contributions to the dairy operation that are at least commensurate with their share of the proceeds of the operation.
Dairy operations must be in compliance with highly erodible land and wetland conservation provisions. For more information, visit fsa.usda.gov/compliance. Adjusted gross income provisions do not apply to DMC.
Producers may have more than one dairy operation, but they must be separate and distinct in order to have a separate contract.
How it Works
To participate in DMC, dairy producers:
Producers have the choice to lock in coverage levels until 2023 and receive a 25 percent discount on their DMC premiums.
FSA and representatives from the University of Minnesota and the University of Wisconsin have partnered on the development of a DMC decision support tool that helps producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net. It allows farmers to simplify their coverage level selection by combining operation data and other key variables to calculate coverage needs based on price projections Visit the tool.
How to Apply
FSA opens enrollment for DMC on Oct. 13 for calendar year 2021. The deadline to enroll for 2021 calendar year coverage is Dec. 11, 2020.
Enrollment for calendar year 2019 DMC coverage opened on June 17, 2019 and closed on Sept. 27, 2019. Enrollment for the 2020 calendar year coverage opened on Oct 7, 2019 and closed on Dec. 20, 2020.
More Information
Dairy Margin Coverage
Dairy Margin Coverage Video – informational video on use of the dairy decision tool.
This DMC decision tool can be used to help you look at and think about what your opportunities are.
Note on Sequestration: Payments under DMC may be reduced by a certain percentage (5.7 percent for 2021; 5.9 percent for 2020; 6.2 percent for 2019) due to a sequester order required by Congress and issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985. Should a payment reduction be necessary, FSA will reduce the payment by the required amount.
Enrollment, Production, and Payments Updates
Enrollment, Production and Payment Updates – Weekly Report
FSA opened enrollment for DMC on Oct. 7 for calendar year 2020. The deadline to enroll for 2020 calendar year coverage is Dec. 20. 2019. Signup for calendar year 2019 DMC coverage opened on June 17, 2019 and closed on Sept. 27, 2019. Weekly DMC program enrollment, production and payment updates will be posted every Monday at 2:00 PM Eastern.
Review Previous reports
Read the details on how the prices below are used in the DMC calculation.
A change to use premium and supreme alfalfa hay will be used in the feed cost calculation for DMC
Month | Corn ($/bu) | Blended Alfalfa Hay ($/ton) | Soybean Meal ($/ton) | All Milk ($/cwt) | Final Feed Costs for DMC($/cwt) | Milk Margin Above Feed Costs for DMC($/cwt) |
---|---|---|---|---|---|---|
January | 3.79 | 190.50 | 300.11 | 19.60 | 8.88 | 10.72 |
February | 3.78 | 190.50 | 295.28 | 18.90 | 8.84 | 10.06 |
March | 3.68 | 190.00 | 312.38 | 18.00 | 8.85 | 9.15 |
April | 3.29 | 195.00 | 295.39 | 14.40 | 8.37 | 6.03 |
May | 3.20 | 195.00 | 288.56 | 13.60 | 8.23 | 5.37 |
June | 3.16 | 190.00 | 288.66 | 18.10 | 8.11 | 9.99 |
July | 3.21 | 183.00 | 291.25 | 20.50 | 8.09 | 12.41 |
August | 3.12 | 182.00 | 290.18 | 18.80 | 7.97 | 10.83 |
September | 3.41 | 181.50 | 319.99 | 17.90 | 8.50 | 9.40 |
October | 3.61 | 182.50 | 367.11 | 20.20 | 9.07 | 11.13 |
November | ||||||
December |
Month | Corn ($/bu) | Blended Alfalfa Hay ($/ton) | Soybean Meal ($/ton) | All Milk ($/cwt) | Final Feed Costs for DMC($/cwt) | Milk Margin Above Feed Costs for DMC($/cwt) |
---|---|---|---|---|---|---|
January | 3.56 | 201.00 | 314.92 | 16.60 | 8.89 | 7.71 |
February | 3.60 | 202.50 | 306.83 | 16.80 | 8.89 | 7.91 |
March | 3.61 | 198.50 | 306.38 | 17.50 | 8.84 | 8.66 |
April | 3.52 | 209.00 | 304.26 | 17.70 | 8.88 | 8.82 |
May | 3.63 | 213.00 | 297.52 | 18.00 | 9.00 | 9.00 |
June | 3.98 | 205.00 | 324.75 | 18.10 | 9.47 | 8.63 |
July | 4.16 | 196.00 | 310.77 | 18.70 | 9.43 | 9.27 |
August | 3.93 | 193.50 | 296.42 | 18.90 | 9.05 | 9.85 |
September | 3.80 | 192.50 | 295.57 | 19.30 | 8.89 | 10.41 |
October | 3.84 | 192.00 | 309.48 | 19.90 | 9.02 | 10.88 |
November | 3.68 | 191.00 | 303.13 | 21.00 | 8.79 | 12.21 |
December | 3.71 | 187.50 | 299.59 | 20.70 | 8.75 | 11.95 |
Corn, Premium and Supreme Alfalfa hay and All-milk full month prices (not preliminary) can be found in the National Agricultural Statistics Service Agricultural Prices monthly publication.
Soybean Meal prices can be found in the Agricultural Marketing Service daily Central Illinois Soybean Processor report. (Go to the 48 percent Soybean Meal R monthly price at the bottom of the report).