2023 DMC Enrollment Now Open
Enrollment for the USDA’s Dairy Margin Coverage (DMC) is now open until Dec. 7, 2022.
To sign up, producers must pay the $100 administrative fee and sign the DMC contract. 2023 enrollment will not be approved until the 2022 premium debt is paid.
Farm Service Agency (FSA) Administrator Zach Ducheneaux says that DMC provides critical assistance to both small- and mid-sized dairies in the U.S. by helping them make sure they can manage the numerous and often unpredictable uncertainties that adversely impact market prices for milk.
“This year showed why enrolling in DMC makes good business sense,” he states. “Early in the year, some economists predicted that DMC would not trigger any payments for the calendar year, but then fast forward to now, when we’re starting to see payments trigger and a return on investment.”
DMC payments are triggered when the difference between the national all-milk price and the national average feed cost (the margin) falls below the producer-selected margin trigger, ranging from Tier 1 from $4.00 to $9.50, and Tier 2 from $4.00 to $8.00, calculated monthly.
FSA shares that in 2021, more than 19,000 operations enrolled in DMC and received more than $1.1 billion in payments, with an average payment of more than $62,000 paid. To date in 2022, the number of operations enrolled in DMC fell to 17,776 and triggered more than $47.9 million in indemnity payments for August.
Feed costs rising to $7.24 bu. for corn, $510.90/ton for soybean meal and $343 per ton for Premium and Supreme alfalfa triggered the first DMC indemnity payment for 2022 at the $9.50, $9 and $8.50 levels for August.
National Milk Producers Federation (NMPF) President and CEO, Jim Mulhern, strongly urged producers to contact their local FSA office and sign up.
“The current combination of high prices with costs that can be even higher illustrates the basic value of DMC for producers who can benefit from the program,” Mulhern says. “By calculating assistance via a margin rather than a target price, DMC offers a measure of protection against the current cost volatility that’s challenging many milk producers.”
Farmers should also consider signing up for federally backed risk-management programs appropriate to their operations, Mulhern said.
Once again, Supplemental DMC is available to producers in 2023. Last year, USDA first introduced this – which provided $42.8 million in payments to better help small- and mid-sized dairy operations that had increased production over the years but were not able to enroll the additional production.
Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023. Eligible dairy operations with less than 5 million pounds of established production history may enroll supplemental pounds.
For producers who enrolled in Supplemental DMC in 2022, the supplemental coverage will automatically be added to the 2023 DMC contract that previously established a supplemental production history.
Producers who did not enroll in Supplemental DMC in 2022 can do so now. Producers should complete their Supplemental DMC enrollment before enrolling in 2023 DMC. To enroll, producers will need to provide their 2019 actual milk marketings, which FSA uses to determine established production history.
October 18, 2022