At a glance:
- DMC enrollment for the 2026 coverage year opens Jan. 12 and runs through Feb. 26.
- Tier 1 coverage expands from 5 million to 6 million pounds under OBBBA.
- All producers will establish a new production history using more recent milk marketings.
- Producers can lock in coverage from 2026 through 2031 with a 25% premium discount.
Dairy farmers will soon have the opportunity to enroll in an expanded and reauthorized Dairy Margin Coverage (DMC) program, following improvements included in the One Big Beautiful Bill Act (OBBBA).
During the 107th American Farm Bureau Federation Convention, U.S. Secretary of Agriculture Brooke Rollins announced enrollment for the 2026 DMC coverage year will open Jan. 12 and run through Feb. 26. DMC remains a key safety net program designed to help offset the gap between milk prices and feed costs during periods of financial stress.
Signed into law by President Donald Trump on July 4, 2025, OBBBA reauthorized DMC through 2031 and introduced several significant changes aimed at strengthening the program’s value for dairy producers.
Higher Tier 1 Coverage
One of the most notable updates is the expansion of Tier 1 coverage. Under OBBBA, the Tier 1 production threshold increases from 5 million pounds to 6 million pounds of milk. This change allows more production to qualify for lower premium rates, improving affordability and risk protection for small- and mid-sized dairy operations.
New Production History Established
All dairy operations that enroll in DMC for the 2026 coverage year will establish a new production history.
For existing operations that began marketing milk on or before Jan. 1, 2023, production history will be based on the highest milk marketings from 2021, 2022 or 2023. New dairy operations that started after Jan. 1, 2023, will use their first year of monthly milk marketings, even if that year is incomplete.
Producers will be required to provide milk marketing statements or other acceptable production evidence to establish their production history.
Multiyear Enrollment Option with Discounted Premiums
OBBBA also introduces a long-term enrollment option. Dairy operations can choose to lock in DMC coverage levels for six years, covering 2026 through 2031. Producers who select this option will receive a 25% discount on premium fees, offering additional cost savings and predictability.
Coverage Options Remain Flexible
DMC continues to offer multiple coverage levels, including a catastrophic option that is available at no cost beyond the $100 administrative fee. Producers can select coverage levels that best align with their risk tolerance and financial goals.
To help evaluate coverage options, producers are encouraged to use USDA’s online dairy decision tool, which allows operations to compare scenarios and determine the most appropriate level of protection.
With higher Tier 1 coverage, discounted premiums for long-term participation and updated production history rules, the changes under OBBBA are expected to enhance DMC’s role as a risk management tool as producers plan for the years ahead.
