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DMC Payments Triggered for the First Time in 2023


For the first time this year, a Dairy Margin Coverage (DMC) payment will be issued. Yesterday, USDA’s Farm Service Agency announced that February’s DMC income over feed costs calculation is $7.94/cwt. Milk covered at the $9.50 level will realize an indemnity of $1.56.



Each 1 million pounds insured at $9.50 will be paid $1,237.09 before sequestration. This month’s payment almost covers the annual premium.


September’s All-Milk price was $23.10/cwt. Premium alfalfa hay was $328/ton, corn was $6.64/bu. and soybean meal was $482.40.


Phil Plourd, president of Ever.ag, says that over the past several months we’ve seen dairy commodities and milk prices roll lower.


“While feed prices are off their highs, they’ve not moved down as much as milk prices. So here we are,” he says. “The big question from where we sit is, ‘What will the second half of the year look like?’ Milk futures are still trading at the upper end of the historical range and grain prices are beginning to fall.”


2023 DMC Enrollment

The window to enroll in 2023 DMC and Supplemental Dairy Margin Coverage has officially closed as of Jan. 31. Less than 73% of dairy operations enrolled for DMC coverage this year.


The DMC program was authorized in the 2018 farm bill to offer protection to producers when the difference between the all-milk price and the average feed price falls below the producer-selected margin trigger.


Jim Mulhern, NMPF CEO, says DMC’s catastrophic coverage level is at the top of his team’s farm bill list.


“The catastrophic coverage level within the basic DMC includes up to 5 million pounds of annual protection, which is about a 200 to 220 cow herd. We’re looking at DMC’s tier 2—anything above basic—adjustments because those markets collapsing would be more akin to a truly ‘catastrophic’ event,” says Mulhern.


March 1, 2023


dairyherd.com


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