After triggering Dairy Margin Coverage (DMC) payments in both August and September, USDA’s Farm Service Agency announced that November’s DMC income over feed costs calculation is $10.89/cwt. This means that for the second month in a row no indemnity payment will be issued.
The all-milk price fell $0.30 to $25.60. All feed inputs followed suiting, dropping as documented below.
- Supreme hay: $331/ton, down $17
- Corn: $6.39/bu., down a penny
- Soybean meal: $436.75/ton, down $31.93
The income over feed costs calculated to be $10.89/cwt for November, $0.18 higher than October. Still, the November milk price average was $4.90 higher than the previous year and year-to-date milk price averaged $25.64/cwt., the highest average on record.
2023 DMC Enrollment
DMC payments are triggered when the difference between the national all-milk price and the national average feed cost (the margin) falls below the producer-selected margin trigger, ranging from Tier 1 from $4.00 to $9.50, and Tier 2 from $4.00 to $8.00, calculated monthly.
FSA shares that in 2021, more than 19,000 operations enrolled in DMC and received more than $1.1 billion in payments, with an average payment of more than $62,000 paid.
National Milk Producers Federation (NMPF) President and CEO, Jim Mulhern, strongly urged producers to contact their local FSA office and sign up. The deadline to sign up was pushed back. The new deadline to enroll is Jan. 31, 2023.
“The current combination of high prices with costs that can be even higher illustrates the basic value of DMC for producers who can benefit from the program,” Mulhern says. “By calculating assistance via a margin rather than a target price, DMC offers a measure of protection against the current cost volatility that’s challenging many milk producers.”
Farm Service Agency (FSA) Administrator Zach Ducheneaux says that DMC provides critical assistance to both small- and mid-sized dairies in the U.S. by helping them make sure they can manage the numerous and often unpredictable uncertainties that adversely impact market prices for milk.
“Last year showed why enrolling in DMC makes good business sense,” he states. “Early in the year, some economists predicted that DMC would not trigger any payments for the calendar year, but then fast forward to now, when we’re starting to see payments trigger and a return on investment.”
