Dairy Margin Coverage Program

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.
• Dairy Margin Coverage Fact Sheet

At a milk margin minus feed costs of $9.50 or less, DMC payments are possible depending on the level of coverage chosen by the dairy producer.

For the 2021 DMC program year, a payment has triggered for February – income over feed cost margin is $6.22 per hundredweight (cwt). A payment also triggered in January.

For the 2020 DMC program year, payments have triggered for March, April, May, September and December.

For the 2019 DMC program year, payments triggered in January, February, March, April, May, June and July.

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.

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.

FSA and representatives from the University of Minnesota and the University of Wisconsin have 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.