USDA Opens 2022 Signup for Dairy Margin Coverage
December 16, 2021
WASHINGTON — USDA announced this week that enrollment is open for the Dairy Margin Coverage program, which includes an expanded feature.
Signup runs from Dec. 13 to Feb. 18, enabling producers to get protection through this safety-net program for another year as well as get additional assistance through the new Supplemental DMC.
Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production. Additionally, USDA’s Farm Service Agency updated how feed costs are calculated, which will make the program more reflective of actual dairy producer expenses.
Supplemental DMC Enrollment
Eligible dairy operations with less than 5 million pounds of established production history may enroll supplemental pounds based upon a formula using 2019 actual milk marketings, which will result in additional payments. Producers will be required to provide FSA with their 2019 Milk Marketing Statement.
Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023. Participating dairy operations with supplemental production may receive retroactive supplemental payments for 2021 in addition to payments based on their established production history.
Supplemental DMC will require a revision to a producer’s 2021 DMC contract and must occur before enrollment in DMC for the 2022 program year. Producers will be able to revise 2021 DMC contracts and then apply for 2022 DMC by contacting their local USDA Service Center.
DMC 2022 Enrollment
After making any revisions to 2021 DMC contracts for Supplemental DMC, producers can sign up for 2022 coverage. DMC provides eligible dairy producers with risk management coverage that pays producers when the difference between the price of milk and the cost of feed falls below a certain level. So far in 2021, DMC payments have triggered for January through October for more than $1 billion.
For DMC enrollment, producers must certify with FSA that the operation is commercially marketing milk, sign all required forms and pay the $100 administrative fee. The fee is waived for farmers who are considered limited resource, beginning, socially disadvantaged, or a military veteran. To determine the appropriate level of DMC coverage for a specific dairy operation, producers can use the online dairy decision tool.
Updates to Feed Costs
USDA is also changing the DMC feed cost formula to better reflect the actual cost dairy farmers pay for high-quality alfalfa hay. FSA will calculate payments using 100% premium alfalfa hay rather than 50%. The amended feed cost formula will make DMC payments more reflective of actual dairy producer expenses.
Additional Dairy Assistance
This week’s announcement is part of a broader package to help the dairy industry respond to the pandemic and other challenges. USDA is also amending Dairy Indemnity Payment Program regulations to add provisions for the indemnification of cows that are likely to be not marketable for longer durations, as a result, for example, of per- and polyfluoroalkyl substances.
FSA also worked closely with USDA’s Natural Resources Conservation Service to target assistance through the Environmental Quality Incentives Program and other conservation programs to help producers safely dispose of and address resource concerns created by affected cows.
Other recent dairy announcements include $350 million through the Pandemic Market Volatility Assistance Program and $400 million for the Dairy Donation Program.
Additional details on changes to DMC and DIPP can be found in a rule that will be published soon in the Federal Register. This rule also included information on the new Oriental Fruit Fly Program as well as changes to FSA conservation programs.
To learn more or to participate in DMC or DIPP, producers should contact their local USDA service center. Service center staff continue to work with agricultural producers via phone, email and other digital tools. Because of the pandemic, some centers are open to limited visitors. Producers should contact their service center to set up an in-person or phone appointment.
Additionally, more information related to USDA’s response and relief for producers can be found at farmers.gov/coronavirus.