One thing we learned in 2020 is the value of safety net programs. In the first quarter of the year many producers were caught off guard when the black swan event of COVID-19 pulled a rug out from under the dairy markets. Let’s not make that mistake again. Enrollment for Dairy Margin Coverage program for 2021 ends Friday, Dec. 11, 2020.
“2020 has been a challenging year for agricultural producers, and we don’t know yet what the next year will bring,” FSA Administrator Richard Fordyce. “Dairy producers should definitely consider coverage for 2021 as even the slightest drop in the margin can trigger payments.”
The DMC program, created by the 2018 Farm Bill, offers market protection to dairy producers when the difference between the all-milk price and the average feed cost falls below a certain dollar amount selected by the producer.
Farmers can select a $4.00 catastrophic level of coverage with no premium fee or they can choose to buy-up coverage where the premium is based on margin triggers between $4.50 and $9.50 on 5 to 95 percent of established production history. FSA has a margin calculator tool to help determine what level of coverage your operation needs.
2020 Program Payments
At press time, the DMC program paid out four times in 2020.
