Starting Wednesday, February 28, dairy producers will be able to enroll for 2024 Dairy Margin Coverage (DMC.) This is an important safety net program offered through the U. S. Department of Agriculture (USDA), that provides producers with price support to help offset milk and feed price differences. DMC signup ends Monday, April 29. Payments may begin as soon as March 4, for any payments that triggered in January 2024.
DMC is a voluntary risk management program that offers 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. In 2023, Dairy Margin Coverage payments triggered in 11 months including two months, June and July, where the margin fell below the catastrophic level of $4 per hundredweight. [This was] a first for Dairy Margin Coverage or its predecessor, Margin Protection Program.
USDA’s Farm Service Agency (FSA) has revised the regulations for DMC to allow eligible dairy operations to make a one-time adjustment, to established production history. This adjustment will be accomplished by combining previously established supplemental production history with DMC production history, for those dairy operations that participated in Supplemental Dairy Margin Coverage during a prior coverage year. DMC has also been authorized through calendar year 2024. Congress passed a 2018 Farm Bill, requiring these regulatory changes to the program.
“FSA is announcing the sign up for 2024 Dairy Margin Coverage. We encourage producers to enroll in this important safety net program. In reviewing 2023 margins and the more than $1.2 billion in Dairy Margin Coverage payments issued to producers, Dairy Margin Coverage is proven to be a program to reduce risk for our dairy producers,” said FSA Administrator Zach Ducheneaux. “If 2023 taught us anything, it’s that we honestly have no idea what will happen in the market in any given year. Producers, who took advantage of this affordable risk management tool for the 2023 program year, were able to mitigate some financial impacts on their operations. At $0.15 per hundredweight for $9.50 coverage, risk protection through Dairy Margin Coverage is a relatively inexpensive investment in a true sense of security and peace of mind.”