Deadline Extended for Dairy Margin Coverage Program

Dairy Margin Update 092319
Budget Deadline ( MGN Image )

The U.S. Department of Agriculture (USDA) extended the deadline for dairy farmers to enroll in the Dairy Margin Coverage (DMC) program to Sept. 27, 2019.  The deadline had previously been Sept. 20.

DMC is authorized by the 2018 Farm Bill to provide price protection when the difference between the all-milk price and average feed cost (margin) falls below a dollar amount selected by the dairy farmer.

“More than 21,200 dairy operations have already signed up for DMC,” says Bill Northey, USDA Under Secretary for Farm Production and Conservation. “With smaller margins and increased feed costs, DMC has resulted in almost $230 million in payments disbursed.”

Margin payments have triggered for each month from January through July so far. Dairy producers who elect higher coverage levels could be eligible for payments for all seven months.  Under certain levels, the amount paid to dairy farmers will exceed the cost of the premium.

“I know that some farmers may still be cautious given their experiences with former dairy support programs, but dairy producers who have not signed up yet should come into a local office to learn how much money the program can put into their pockets,” Northey says.

The USDA Farm Service Agency has launched a new web visualization of DMC data. So far, DMC has resulted in almost $230 million in disbursed payments.

An example dairy operation with an established production history of 3 million pounds and elects for the $9.50 coverage level on 95 percent of production will pay $4,275 in total premium payments for all of 2019 and receive $15,437.50 in DMC payments for all margin payments announced to date.  Additional payments will be made if calculated margins remain below the $9.50/cwt. level for any remaining months of 2019.

“My message to those dairy producers who are hurting out there: Don’t leave this kind of financial assistance on the table,” Northey says.

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