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NMPF Advises Producers to Sign up for DMC Before Deadline

Karen Bohnert

March 14, 2022

Earlier this year, an extension was given to the USDA’s Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) programs. The March 25th deadline is quickly approaching.

While feed costs have risen, so have milk prices, therefore no DMC indemnity payment has been triggered. However, producers are being advised to reconsider their initial decisions and sign up before the March 25th deadline.

“Over the past two years, American dairy farmers have faced unprecedented uncertainty, from the ongoing pandemic to protracted natural disasters. As producers continue to manage these interconnected challenges, FSA has tools at the ready to provide critical support,” said FSA Administrator Zach Ducheneaux. “We are encouraging dairy operations to take advantage of the extended deadline and join the 8,969 operations that have already enrolled for 2022 coverage. At 15 cents per hundredweight at the $9.50 level of coverage, DMC is a very cost-effective risk management tool for dairy producers.”

With a record of more than $1.1 billion DMC payments are expected to be distributed to dairy producers under the 2021 program, National Milk Producers Federation (NMPF) is urging every dairy farmer to sign up for maximum DMC coverage.

“DMC offers cost-effective margin protection for small and medium-sized producers and inexpensive catastrophic coverage for larger dairies. It provides critical protection against unforeseen market disruptions – and if the past two years have shown anything, it’s that unforeseen market disruptions can happen,” Jim Mulhern, NMPF President and CEO, states. “We urge all producers to sign up for DMC protection, part of a suite of NMPF-supported, federally backed risk-management that also includes the Dairy-RP and LGM-Dairy programs.”

Applications for supplemental DMC payments will require a revision to a producer’s 2021 DMC contract and must occur before DMC enrollment for 2022. The program limits Supplemental DMC payment to cover 75% of the difference between an eligible dairy operation’s actual 2019 milk marketings and its previous DMC milk marketing history. Eligible producers must provide FSA officials with their 2019 milk marketing statements, and DMC premiums are required on enrolled supplemental production at the standard premium rate.

Producers are urged to contact their local Farm Service Agency (FSA) office by March 25, 2022, to sign up.


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