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2023 Dairy Margin Coverage Deadline Extended; NMPF Comments

WASHINGTON, Dec. 8, 2022 – The U.S. Department of Agriculture (USDA) has extended the deadline  for producers to enroll in Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) for program year 2023 to Jan. 31, 2023.

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.

“We recognize this is a busy time of year with many competing priorities, so we’ve extended the DMC enrollment deadline to ensure every producer who wants coverage for 2023 has the opportunity to enroll in the program,” said Farm Service Agency (FSA) Administrator Zach Ducheneaux. “Early projections indicate DMC payments are likely to trigger for the first eight months in 2023. We all know that markets fluctuate, sometimes at a moment’s notice and sometimes with no warning at all, so now’s the time to ensure your operation is covered. Please don’t let this second chance slide.”

Nearly 18,000 operations that enrolled in DMC for 2022 have received margin payments for August and September for a total of $76.3 million. At $0.15 per hundredweight for $9.50 coverage, risk coverage through DMC is a relatively inexpensive investment.

DMC offers different levels of coverage, even an option that is free to producers, aside from a $100 administrative fee. Limited resource, beginning, socially disadvantaged, and military veteran farmers and ranchers are exempt from paying the administrative fee, if requested. To determine the appropriate level of DMC coverage for a specific dairy operation, producers can use the online dairy decision tool.

Supplemental DMC 

Last year, USDA introduced Supplemental DMC, 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 is also available for 2023.  The enrollment period for 2023 Supplemental DMC is also extended to Jan. 31, 2023.

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.

DMC Payments 

FSA will continue to calculate DMC payments using updated feed and premium hay costs, making the program more reflective of actual dairy producer expenses.  These updated feed calculations use 100% premium alfalfa hay rather than 50%.

For more information on DMC, visit the DMC webpage or contact your local USDA Service Center.

USDA touches the lives of all Americans each day in so many positive ways.  Under the Biden-Harris administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit usda.gov.

NMPF Statement on USDA’s Extended Deadline for Dairy Margin Coverage Signup
ARLINGTON, VA – From NMPF President and CEO Jim Mulhern:
“NMPF thanks Secretary Vilsack and USDA’s Farm Service Agency for extending the deadline for Dairy Margin Coverage Program signup to Jan. 31. With input costs at record highs and early projections showing possible DMC payments for the first eight months of 2023, it’s imperative that producers have time to consider their coverage needs and make choices that best fit their operations and risk-management plans.
“Farmers also should use this extended DMC signup period to consider USDA’s full suite of risk-management options, all supported by NMPF. While DMC is designed to promote stable revenues and protect against financial catastrophe for small and medium-sized producers, other options including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, both of which were revamped in the 2018 Farm Bill at NMPF’s urging, provide important and effective risk management.
“NMPF also thanks USDA for giving farmers who did not sign up for supplemental DMC coverage in 2022 based on updated production levels another opportunity to do so this year. Finally, producers should keep in mind that USDA is developing a separate milk loss program that was provided for in legislation enacted last year. The program reimburses dairy producers of all sizes for milk dumped on account of disasters that occurred in 2020 and 2021. NMPF is working with USDA as it develops the initiative.”
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