The Dairy Margin Coverage (DMC) Program, administered by the Farm Service Agency (FSA), is a voluntary risk management tool for dairy producers. It offers financial assistance when the margin between the all-milk price and average feed cost falls below a coverage level chosen by the producer. By participating in DMC, dairy farmers can protect themselves against declines in milk prices and increases in feed costs, thereby ensuring more predictable and stable income. The program includes both catastrophic coverage and additional, higher levels of coverage for an annual premium.
Program Features:
- Eligibility: Eligible applicants include dairy operations in the United States that produce and commercially market milk from cows. Producers must provide production records and be in compliance with conservation regulations.
- Coverage Levels: Producers can select coverage levels ranging from $4.00 to $9.50 per hundredweight (cwt) of milk, in $0.50 increments.
- Premium Rates: Vary based on the coverage level and the production history of the dairy operation. Discounts are available for small-scale producers and those opting for higher coverage levels.
- Production History: Based on the highest milk production in any one of the previous three years.
- Payments: Calculated monthly when the actual dairy production margin falls below the selected coverage level. Payments help offset the difference between the margin and the selected coverage level.
- Enrollment Period: Annual enrollment periods are specified by the FSA, during which producers can sign up for the program and select their desired coverage levels.
Additional Benefits:
- Risk Management: Helps dairy producers manage the financial risks associated with volatile milk prices and feed costs.
- Income Stabilization: Provides a safety net, ensuring more stable and predictable income for dairy farmers.
- Customizable Coverage: Offers flexibility for producers to choose coverage levels that best fit their individual risk management needs.
How to Enroll: To enroll in the Dairy Margin Coverage Program, dairy producers must complete and submit an application to their local FSA office during the specified enrollment period. The application process includes providing production records and selecting the desired coverage level. Detailed enrollment instructions and deadlines are available through the local FSA office or the official USDA website.
