Dairy Margin Coverage (DMC) Program

The 2018 Farm Bill authorized the new Dairy Margin Coverage (DMC) program, which is a voluntary risk management program for dairy producers. DMC replaces the Margin Protection Program for Dairy (MPP-Dairy).

DMC continues to offer protection to dairy producers when the difference between the all milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer.

Decision Tool – The DMC decision tool was designed in partnership with the university of Wisconsin to help producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net.

The weekly Dairy Margin Coverage (DMC) Enrollment, Production and Payment report will be updated every Monday at 2:00 PM Eastern.

About the Program

Program at a Glance

The program provides:

Catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee that is waived in some cases; and
Various levels of buy-up coverage.

Benefits

DMC helps producers manage the ups and downs. For the 2019 DMC program (calendar) year, payments have triggered in January, February, March, April, May, June, and July.

FSA and the University of Wisconsin partnered on the development of a DMC decision support tool that helps producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net. It allows farmers to simplify their coverage level selection by combining operation data and other key variables to calculate coverage needs based on price projections. Visit the tool.

Who is Eligible?

To be eligible for DMC, a dairy operation must:

Produce and commercially market milk from cows located in the United States; and
Provide proof of milk production at the time of registration.

Dairy operations may consist of one or more dairy producers who are in the business of commercially producing and marketing milk as a single unit.

Dairy producers who are members of the dairy operation must share in the risk of producing milk and make contributions to the dairy operation that are at least commensurate with their share of the proceeds of the operation.

Dairy operations must be in compliance with highly erodible land and wetland conservation provisions. For more information, visit fsa.usda.gov/compliance. Adjusted gross income provisions do not apply to DMC.

Producers may have more than one dairy operation, but they must be separate and distinct in order to have a separate contract.

How it Works

To participate in DMC, dairy producers:

Select a coverage level ranging from $4.00 to $9.50 per cwt, in $0.50 increments
Select a coverage percentage of the dairy operation’s production history ranging from 5 percent to 95 percent, in 5 percent increments

Producers have the choice to lock in coverage levels until 2023 and receive a 25 percent discount on their DMC premiums.

Dairy operations who paid MPP-Dairy premiums during any calendar year from 2014 through 2017 may eligible to receive a repayment for part of the premiums paid into the program. Through September 20, 2019, an operation either can elect to receive 50 percent of the repayment amount as a cash refund or take 75 percent of the amount as a credit that can be used toward premiums for DMC.

How to Apply

FSA opened enrollment for DMC on Oct. 7 for calendar year 2020. The deadline to enroll for 2020 calendar year coverage is Dec. 13. 2019.

Enrollment for calendar year 2019 DMC coverage opened on June 17, 2019 and closed on Sept. 27, 2019.

More Information

Dairy Margin Coverage – a new risk management option.

Watch Dr. Mark Stephenson as he describes what the Dairy Margin Coverage (DMC) decision tool is and how it works and functions:

Dairy Margin Coverage Video

This DMC decision tool can be used to help you look at and think about what your opportunities are.

Note on Sequestration: Payments under DMC may be reduced by a certain percentage (5.9 percent for 2020; 6.2 percent for 2019) due to a sequester order required by Congress and issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985. Should a payment reduction be necessary, FSA will reduce the payment by the required amount.

Enrollment, Production, and Payments Updates

Enrollment, Production and Payment Updates – Weekly Report

FSA opened enrollment for DMC on Oct. 7 for calendar year 2020. The deadline to enroll for 2020 calendar year coverage is Dec. 13. 2019. Signup for calendar year 2019 DMC coverage opened on June 17, 2019 and closed on Sept. 27, 2019. Weekly DMC program enrollment, production and payment updates will be posted every Monday at 2:00 PM Eastern.

Review Previous reports

2020 Dairy Margin Coverage Weekly Reports

2019 Dairy Margin Coverage Weekly Reports

Month	Corn ($/bu)	Blended Alfalfa Hay ($/ton)	Soybean Meal ($/ton)	All Milk ($/cwt)	Final Feed Costs for DMC($/cwt)	Milk Margin Above Feed Costs for DMC($/cwt)
January	3.56	201.00	314.92	16.60	8.89	7.71
February	3.60	202.50	306.83	16.80	8.89	7.91
March	3.61	198.50	306.38	17.50	8.84	8.66
April	3.52	209.00	304.26	17.70	8.88	8.82
May	3.63	213.00	297.52	18.00	9.00	9.00
June	3.98	205.00	324.75	18.10	9.47	8.63
July	4.16	196.00	310.77	18.70	9.43	9.27
August	3.93	193.50	296.42	18.90	9.05	9.85
September	3.80	192.50	295.57	19.30	8.89	10.41

Dairy Margin Coverage Program

About the Program

2020 Dairy Margin Coverage Weekly Reports

2019 Dairy Margin Coverage Weekly Reports

Prices

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