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USDA announces signup period for Dairy Margin Coverage program

Dairy producers can get coverage through the program for another year as well as get additional assistance through the new Supplemental DMC. The program has triggered payments of $1 billion this year. Signup is through the Farm Service Agency.

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DMC pays producers when the difference between the price of milk and the cost of feed falls below a certain level. Danae Sheppelman / Grand Vale Creative LLC

WASHINGTON — Dairy farmers can soon sign up for an expanded federal safety-net program to protect against price swings in the market.

The U.S. Department of Agriculture on Wednesday, Dec. 8, announced that a signup period for the Dairy Margin Coverage program will run from Dec. 13, 2021, to Feb. 18, 2022.

DMC 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.

Dairy producers can get coverage through the 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 get retroactive payments for that supplemental production.

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Supplemental DMC will require producers to revise their 2021 DMC contract. That must be done 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 .

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 sales, which will result in additional payments. Producers will need to provide FSA with their 2019 Milk Marketing Statement.

Supplemental DMC coverage is applicable to calendar years 2021, 2022 and 2023.

For DMC enrollment, producers must certify with USDA's Farm Service Agency 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 .

USDA is also changing the DMC feed cost formula to better reflect the cost of 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.

DIPP, other changes

USDA also is amending regulations for the Dairy Indemnity Payment Program, or DIPP, to compensate producers for cows that are likely to be not marketable for long periods, as a result, for example, of perfluoroalkyl and polyfluoroalkyl substances, chemicals also known as PFAs.

Other recent dairy announcements include $350 million through the Pandemic Market Volatility Assistance Program and $400 million for the Dairy Donation Program.

To learn more or to participate in DMC or DIPP, producers should contact their local USDA Service Center . Because of the pandemic, some USDA Service 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 .

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