The signup deadline for the Dairy Margin Coverage Program is rapidly approaching.
“It helps dairy farmers manage the financial risks that come from the unpredictable nature of milk markets and feed prices,” says Theresa Sweeney, senior director of communications for the National Mik Producers Federation. She explains how the DMC works.
“So, the DMC provides payments to participating producers when the margin, or the difference between the national average milk price and the average cost of feed, falls below a coverage level that is selected by the farmer. The program was created in the 2018 Farm Bill with strong support from NMPF and its member cooperatives, and it has become a critical safety net, especially for smaller and midsize farms..”
She says recent updates to the program now include more accurate feed cost calculations that fully factor in the cost of premium alfalfa hay, which makes the program more reflective of some of the real-world expenses. She adds that the program provides different coverage levels.
“Dairy farmers can select from a range of margin coverage levels, from four dollars per hundredweight up to 950 per hundredweight, depending on the size of the farm and the risk management needs of that operation. So, the program is designed to be flexible and offers affordable catastrophic coverage for larger farms and then more comprehensive margin protection for smaller and midsize farms. In addition to that, farmers can now obtain payments on more recent production history if they’ve expanded their production between 2014 and 2019, so that’s also available.”
Sweeney says DMC also complements other risk management tools, such as Dairy Revenue Protection and Livestock Gross Margin Program for Dairy, which farmers can stack alongside the DMC program for additional protection on milk production that might not be covered by DMC.
The signup deadline is Monday, March 31. Visit your local FSA office or go to fsa.usda.gov.
Source: NAFB News Service
