March Margin Triggers First DMC Payment of 2020

“This payment comes at a critical time for many dairy producers,” said FSA Administrator Richard Fordyce. “It is the first triggered DMC payment for 2020, and the first payment to dairy producers in seven months.” ( MGN Online )

USDA’s Farm Service Agency (FSA) announced this week that the March 2020 income over feed cost margin was $9.15 per cwt. This margin triggered the first Dairy Margin Coverage (DMC) program payment of 2020. 

“This payment comes at a critical time for many dairy producers,” said FSA Administrator Richard Fordyce. “It is the first triggered DMC payment for 2020, and the first payment to dairy producers in seven months.”

Current projections indicate that a DMC payment is likely to trigger every month for the remainder of 2020, a different expectation from last July when some market models had forecast no program payments for 18 months, FSA said in a press release.

Marin Bozic, a dairy economist with the University of Minnesota, estimates that DMC participants could receive $17,500 in payments through the end of the year for every 1 million pounds of production history that they are signed up for. That equates to roughly 50 cows. Tier 1 payments are limited to the first 5 million pounds of milk production history.

According to USDA’s decision tool, the payments per cwt approximate $2.50/cwt in April, $4.50/cwt in May and June, $3/cwt in July, $2/cwt in August and $1/cwt in September, and roughly 50₵/cwt in October, November and December.

 
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