Tag: dairy dmc

Signup Underway for Improved DMC to Assist Dairy Farmers Facing Low Prices

Posted on by Rachel Ravencraft

The National Milk Producers Federation is pleased that Dairy Margin Coverage Program signup is under way, with key improvements aiding farmers as prices have fallen and DMC assistance becomes essential for some farms in 2026.

“An improved DMC Program couldn’t come a moment too soon,” Gregg Doud, President & CEO of NMPF, said. “We appreciate USDA’s efforts to quickly update the DMC program, and we urge dairy farmers who will benefit from the program to sign up as part of their risk-management plans.”

The DMC changes were part of the One Big Beautiful Bill Act passed last year that included multiple benefits for dairy, including making the Section 199A tax deduction and making more funds available for dairy farmers and their cooperatives to use for conservation programs.

DMC revisions published in the Federal Register include:

  • An opportunity to establish new production history based on the highest annual milk production level from any one of the 2021, 2022, or 2023 calendar years. Production history established between 2014-2025 will no longer be applicable for coverage.
  • USDA clarification on how new operations (i.e., those that began marketing milk after Jan. 1, 2023) will be able to establish production history.
  • Eligibility for operations to enroll their first 6 million pounds of production at the Tier 1 level, up from 5 million pounds, with all additional production covered under Tier 2. Premium rate fees under Tiers 1 and 2 are unchanged.
  • An opportunity for operations to make a one-time election of coverage level and coverage percentage, “locking in” those elections for a six-year period from January 2026-December 2031. Those who elect this option must participate in DMC at the same coverage levels for the six-year period and will receive a 25% premium discount for doing so.

Signup for the revised DMC runs now through Feb. 26. NMPF will keep its members apprised of key developments, with staff available to answer questions as necessary.

DMC Margin Drops Again in July; Margin Formula to Be Updated

Posted on by Theresa Sweeney

USDA has reported the July margin under the Dairy Margin Coverage program at $5.68/cwt, a drop of 56 cents from the June margin and the lowest DMC margin since May 2020. The lower July margin resulted from a $0.50/cwt drop in the U.S. average all-milk price, to $17.90/cwt, and a six-cent per hundredweight higher feed cost. A lower soybean meal price offset a good part of a higher price of corn, while alfalfa hay prices were slightly higher.

USDA announced Aug. 19 that it will “make improvements to the Dairy Margin Coverage safety net program updating the feed cost formula to better reflect the actual cost dairy farmers pay for high quality alfalfa. This change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021.” Full details will be provided when regulations are published in the coming weeks, but it is expected that the price of alfalfa hay used in the DMC feed cost calculation will be changed, from the current 50-50 blend of the U.S. average price for all alfalfa and the average price of premium and supreme alfalfa hay in the five largest milk producing states, to just the 5-state average for premium and supreme alfalfa.

For the July DMC margin, the change would result in a margin of $5.47/cwt for the month, another 21 cents a hundredweight lower than the margin USDA has preliminarily announced. Averaged over all months from January 2020 through this past July, the change would result in an average $15 per ton higher alfalfa hay price used in the DMC feed cost calculation and a 13.1-cent higher average payment for DMC coverage at $9.50/cwt.

USDA reported that, as of August 30, the 18,992 operations enrolled in this year’s DMC program are expected to receive $669,741,798 in payments based on previously announced margins, or an average of $35,264 per enrolled operation.