USDA Urges Producer Sign Up for Dairy Margin Coverage

Joel Hastings

Richard Fordyce

Speaking at a press conference held online on Dec. 4, USDA Farm Service Agency Director Richard Fordyce urged dairy producers to enroll in the Dairy Margin Coverage Program before the December 11 deadline. To date, signups are running behind year ago totals with 7840 herds enrolled as of Nov. 30. In 2020 a total of 13,000 herds took part in the program.

The DMC program offers reasonably priced protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

Dr. Marin Bozic

Also speaking at the press event was Dr. Marin Bozic, dairy economist at the University of Minnesota who helped to develop the program and the software calculator tool available to all producers.

“If we get to 60% [of all producers], I would say that is a success. In 2020, a producer who signed up for the full five million lbs. of covered milk at the top $9.50 margin paid $7500 in insurance premiums and recovered over $30,000 in payments.

“Dairy Margin Coverage is an effective program that is going to make a big difference in 2021,” he said.

“DMC should be the cornerstone of any risk management strategy [for herds of any size],” he emphasized.

During his presentation he documented his predictions that increased U.S. milk supplies and slowing demand for dairy products will most likely create lower producer pay prices in the year ahead. He said that while it is unknown what other payments to dairy producers might be made to offset the effects of the COVID-19 pandemic, the new Administration appears to put more emphasis on funding SNAP food programs rather than indemnities for farmers.

Bozic said he hopes that dairymen will be encouraged to sign up in five ways… from the Farm Service Agency itself that offers the program, from dairy media, from land grant university educators, dairy processors and cooperatives and fellow dairy producers.

For more information, visit farmers.gov DMC webpage, or contact your local USDA Service Center. To locate your local FSA office, visit farmers.gov/service-center-locator.





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