Revised DMC Feed Formula Will Add 14 to 31₵ to Payment

Cutting alfalfa. ( Farm Journal, Inc. )

The revised feed margin to the Dairy Margin Coverage program, which now includes a 50% blend of premium and supreme alfalfa hay prices will add 14 to 31₵ to the feed cost formula, resulting in a lower income-over-feed-cost margin and therefore greater payments.

That’s according to Michael Nepveux, an economist with the American Farm Bureau Federation. “This adjustment more closely aligns with rations that dairy producers are actually feeding their cows and more accurately reflects the cost of including top-quality alfalfa in feed,” he says.


Table. Changes in 2019 Feed Cost

Month/2019                       Revised Income-                              Old Income-Over-                            Increase in

                                               Over-Feed-Cost                                Feed-Cost                                         Bottomline

January                                $7.71                                                $7.99                                               $0.28

February                              $7.91                                                     $8.22                                                     $0.31

March                                   $8.66                                                     $8.86                                                     $0.20

April                                       $8.82                                                     $8.96                                                     $0.14

Source: American Farm Bureau Federation


Prices averages for premium and supreme hay are listed in USDA’s Agricultural Prices summary released at the end of each month. The hay prices are listed for California, Idaho, Michigan, Minnesota, New York, Pennsylvania, Texas and Wisconsin.

You can read more analysis of the DMC program and who should sign up here.  Sign-up for the program is now open at dairy farmers’ local Farm Service Agency office.