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.
Eligible applicants include dairy operations in the United States that produce and commercially market milk from cows. Dairy operations provide production records to establish a production history before enrolling in DMC. Dairy operations must be in compliance with conservation regulations.
2027 Enrollment: Oct. 5 through Dec. 18, 2026
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. In 2026, all participating dairy operations established a production history using milk production records for the years of 2021, 2022, or 2023. New dairy operations may create a production history from recent milk production records. The application process includes selecting the desired coverage level. Detailed enrollment instructions and deadlines are available through the local FSA office.
Producers who previously elected the multi-year DMC lock-in option for 2026 through 2031 must annually certify to commercially marketing milk, sign a DMC contract, and pay the $100 administrative fee for each program year to maintain coverage.
Program Features
- 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 2021, 2022, 2023 for existing dairy operations or the first year of monthly milk marketing statements for new dairy operations.
- 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.
DMC Improvements
- Starting in 2026, DMC’s Tier 1 coverage level increased from 5 million pounds to 6 million pounds.
- All dairy operations that elected to enroll in DMC for 2026 established a new production history.
- Existing dairy operations that started marketing milk on or before Jan. 1, 2023, used the higher of milk marketings for the years of 2021, 2022, or 2023.
- New dairy operations starting after Jan. 1, 2023, will use their first year of monthly milk marketings, even for a partial year. Milk marketing statements or production evidence are required to establish a production history.
- Milk marketing statements or production evidence are required to establish a production history.
- Dairy operations also had the option to lock-in coverage levels for six years (2026 - 2031) with premium fees discounted by 25%.
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.