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

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. For the 2020 DMC program (calendar) year, a payment has triggered for March.

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.

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.

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.

FSA opened enrollment for DMC on Oct. 7 for calendar year 2020. The deadline to enroll for 2020 calendar year coverage is Dec. 20. 2019.

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

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 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. 20. 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.

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