Tag: dairy margin coverage

Dairy’s Future Bright, But Present Needs Matter

Posted on by Rachel Ravencraft

Dairy farmers and cooperatives got off to a great start to 2026 in January.

Our prominence in the new Dietary Guidelines for Americans will send a positive message about the value of nutritious dairy products for years to come and make it easier for consumers to have access to those products through federal food programs. Meanwhile, the president’s signature on the Whole Milk for Healthy Kids Act cements a legislative victory for the next generation of milk drinkers, allowing them to have in school what they already have at home and encouraging consumers to keep dairy central to American diets.

But great times for dairy do not necessarily mean great times for individual dairy farmers. Supply and demand that is out of alignment means lower prices, lower margins and hardship for producers now. As the nation’s leading advocate for dairy farmers, we have already started conversations on Capitol Hill and with the White House on what can be done to help farmers continue producing the milk that fuels the nation.

We are optimistic that dairy advocates in the federal government understand what farmers are facing, and that meaningful assistance can be achieved. But politics remains, as they say, the “art of the possible.” We’re focusing on what policies will truly benefit producers and will be achievable in the short term, without falling into the trap of calling for nostrums that could have unintended consequences for producers and commodity markets.

Here are a few approaches we are advocating:

  • Immediate, forceful support for whole milk in schools. We are incredibly encouraged by the administration’s embrace of whole milk in the Dietary Guidelines, which follows Congress’s unanimous support of the Whole Milk for Healthy Kids Act. Now, the challenge is to get into school meals. That means quickly implementing the rules needed to introduce whole and 2% milk to menus and offering funding that will help schools cover any additional expense needed to make these healthy products available.

While whole milk has always been about nutrition for the next generation of milk drinkers, it’s also important to note the immediate effects that greater support could bring: Because whole and 2% absorb butterfat, it will help alleviate some of the supply overhang that’s harming milk checks.

  • As it did during the COVID-19 pandemic and at other times of dairy-industry turmoil, we are asking USDA to consider targeted purchases of dairy products to distribute to communities that need them. This is not a heavy lift, considering that USDA purchases of dairy under Section 32 commodity programs have declined in recent years. Simply returning butter purchases to 2021 levels, and cheese and fluid milk to 2024, would significantly reduce surpluses and boost dairy income, helping balance supply with demand.
  • Bolstered support for federally supported risk management programs. Dairy farmers can help themselves by signing up for the DMC Program, which was improved in last year’s One Big Beautiful Bill Act. With updated production histories and a larger number of pounds covered, DMC is more attractive for farmers now than it was in the past; we encourage all dairy farmers to sign up for it (and potentially lock in a 25% discount on premiums) by the Feb. 26 deadline.

Still, DMC is just one part of the federally supported risk management system for dairy. Improving Dairy Revenue Protection (DRP) coverage with enhanced premium support is appropriate to consider under dairy’s current circumstances. Improvements to both DMC and DRP will ensure dairy producers of all sizes have adequate and affordable risk management tools.

  • Disaster assistance. NMPF appreciates USDA’s announcement of $1 billion in September through the Emergency Livestock Relief Program to help offset increased supplemental feed costs due to floods or wildfires in 2023 and 2024. We encourage USDA to continue moving as quickly as possible to get this funding delivered to producers and to be mindful of opportunities to assist as other disaster-related needs become available.

 

The ideas above are by no means the only ways to assist dairy in a challenging moment, but they’re clear, they’re tangible, and we believe they are achievable, working with the team at USDA and our advocates in Congress. They go hand in hand with the work we do every day for dairy farmers, from pushing for vigilance on H5N1 and New World screwworm to support efforts to open markets and promote U.S. dairy products overseas.

We are not looking for extreme government intervention, which is neither necessary nor likely. But we do know — as support for whole milk and dairy in legislation and the Dietary Guidelines shows — that our federal government appreciates dairy farmers, and that there are tools that can effectively support markets in times of need. We look forward to working across the public and private sectors for solutions that benefit dairy farmers and the cooperatives they own. It’s what we do, in good times, in bad times, and in times when good and bad are both happening, in different ways, at once.

Gregg Doud

President & CEO, NMPF

 

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.

NMPF’s Bjerga on What’s Next for Whole Milk

Posted on by Alan Bjerga

 

NMPF Executive Vice President Alan Bjerga discusses what comes next for whole milk in schools in an interview with WEKZ Radio in Janesville, WI. Passage of the Whole Milk for Healthy Kids Act in Congress will bring whole milk to the next generation of milk-drinkers and ultimately boost dairy prices, but in the meantime logistical and regulatory issues will need to be sorted out. Meanwhile, farmers may see a DMC payment in December as prices decline due to supply issues, and a bright outlook for trade is being boosted further with Senate confirmation of a new chief agricultural trade negotiator.  Bjerga also explains why people are freezing their eggnog for use later in the year, and why horses ate better than humans for much of the 20th century.

June DMC Margin Rises $0.70/cwt

Posted on by Theresa Sweeney

The June margin for the Dairy Margin Coverage Program was $11.10/cwt in June, an increase of $0.70/cwt from May. The June all-milk price was unchanged from May at $21.30/cwt, while the June DMC feed cost formula dropped by $0.70/cwt for the month, as the prices of all three formula feed components decreased, particularly that for premium alfalfa hay.

The forecasts maintained by DMC Decision Tool on the USDA website at the end of July showed the DMC margin topping out $13.20/cwt in November and averaging $12.11/cwt for the year.

NMPF’s Bleiberg Explains Dairy Policy Implications of “Big, Beautiful” Budget Bill

Posted on by Chris Galen

NMPF Executive Vice President Paul Bleiberg explains for listeners of Dairy Radio Now how the recently-passed “one big beautiful bill” will affect dairy policy, including extension for fie years of the Dairy Margin Coverage program.  He also forecasts whether Congress will tackle other elements of the next farm bill yet this year.

Senate Budget Reconciliation Proposal Includes NMPF Priorities

Posted on by Theresa Sweeney

The U.S. Senate on July 1 passed a budget reconciliation bill that largely resembles the House-passed version when it comes to critical dairy issues. The bill passed by a vote of 51-50, with Vice President JD Vance breaking the tie, and House Republican leaders are hoping to send the bill to President Donald Trump by July 4.

The Senate Agriculture Committee’s portion of the bill, released by Chairman John Boozman, R-AR, on June 11, includes numerous NMPF-backed requests that would strengthen dairy and farm policy, including:

  • Renewing the Dairy Margin Coverage (DMC) program through 2031; updating DMC’s production history calculation to be based on the highest production year of 2021, 2022, or 2023; and extending the ability for producers to receive a 25% premium discount for locking in their coverage for the duration of the bill;
  • Providing mandatory funding for USDA to conduct mandatory dairy processing cost surveys every two years to provide better data to inform future make allowance conversations;
  • Folding remaining Inflation Reduction Act conservation dollars into the farm bill baseline, resulting in increased long-term funding for popular, oversubscribed programs like the Environmental Quality Incentives Program;
  • Providing new trade promotion funding based on current programs that return well over $20 in export revenue for every dollar invested in the programs; and
  • Increasing funding for animal health programs that help to prevent, control, and eradicate animal diseases, such as the outbreak of H5N1 in dairy cattle.

“Dairy farmers are grateful to Chairman John Boozman and his committee for putting forward legislation that will create several key opportunities for dairy,” said Gregg Doud, NMPF president and CEO in a statement. “Following last month’s successful vote in the House, we are excited that this legislation positions these investments strongly in the Senate to benefit dairy farmers and the cooperatives they own. We hope they are enacted into law as swiftly as possible.”

The Senate Finance Committee’s portion of the bill, released on June 16, makes permanent the Section 199A tax deduction, enabling dairy farmer-owned cooperatives to continue either passing the deduction back to their farmer owners or reinvesting it in their cooperatives.

NMPF will continue to work with House and Senate committee leaders and other members to maintain these provisions in the final version of the bill that eventually reaches President Trump’s desk.

Little Change from April in May DMC Margin

Posted on by Theresa Sweeney

The May DMC margin lost $0.02/cwt from a month earlier to $10.40/cwt, according to the DMC Decision Tool on the USDA Farm Service Agency website. The Tool had previously predicted the April margin to be the lowest for the year, but a large increase in the price of premium alfalfa hay, equivalent to $0.34/cwt of milk in the DMC feed cost formula, more than offset a $0.30/cwt increase in the May all-milk price, to $21.30/cwt, while much smaller, offsetting prices of corn and soybean meal could only bring the feed cost down by another $0.02/cwt.

The Decision Tool continues to show the DMC margin increasing steadily, now from May, to top out at $13.76/cwt in November and average $12.43/cwt for the year.

NMPF Applauds Senate Reconciliation Dairy Provisions, Urges Congress Toward Final Action

Posted on by Theresa Sweeney

The National Milk Producers Federation, the largest U.S. dairy-farmer organization, commended the U.S. Senate for the bill’s dairy and agriculture provisions, which will create greater financial certainty for producers. NMPF is hopeful that the House will take up the bill and get it to the president’s desk quickly.

“Dairy farmers are grateful for legislation that will create several key opportunities for dairy,” said Gregg Doud, NMPF president and CEO in a statement. “Following last month’s successful vote in the House, we are excited that the Senate’s legislation also positions these investments to benefit dairy farmers and the cooperatives they own. We hope they are enacted into law as swiftly as possible.”

Congress is attempting to pass the measure prior to the July 4 Congressional recess.

The Senate Agriculture Committee’s portion of the bill includes numerous NMPF-backed requests that would strengthen dairy and farm policy, including:

  • Renewing the Dairy Margin Coverage (DMC) program through 2031; updating DMC’s production history calculation to be based on the highest production year of 2021, 2022, or 2023; and extending the ability for producers to receive a 25% premium discount for locking in their coverage for the duration of the bill;
  • Providing mandatory funding for USDA to conduct mandatory dairy processing cost surveys every two years to provide better data to inform future make allowance conversations;
  • Folding remaining Inflation Reduction Act conservation dollars into the farm bill baseline, resulting in increased long-term funding for popular, oversubscribed programs like the Environmental Quality Incentives Program;
  • Providing new trade promotion funding based on current programs that return well over $20 in export revenue for every dollar invested in the programs; and
  • Increasing funding for animal health programs that help to prevent, control, and eradicate animal diseases, such as the outbreak of H5N1 in dairy cattle.

The Senate Finance Committee’s portion of the bill, released on June 16, makes permanent the Section 199A tax deduction, enabling dairy farmer-owned cooperatives to continue either passing the deduction back to their farmer owners or reinvesting it in their cooperatives.

NMPF is grateful to House and Senate committee leaders, including Agriculture Committee Chairmen GT Thompson, R-PA, and John Boozman, R-AR and tax-writing committee chairs Rep. Jason Smith, R-MO, and Sen. Mike Crapo, R-ID, and other members who have authored these provisions in the bill moving toward President Trump’s desk.

DMC Margin Drops $1.13/cwt in April, Mostly on Lower Milk Price

Posted on by Theresa Sweeney

The monthly DMC margin fell $1.13 cwt in April to $10.42/cwt of milk on a lower all-milk price.

The DMC feed cost calculation rose $0.13/cwt of milk from March to April, mostly on a higher premium alfalfa hay price, as smaller corn and soybean meal price changes were nearly offsetting on a milk equivalent basis. The all-milk price was down $1/cwt to $21/cwt.

The DMC Decision Tool on the USDA Farm Service Agency website projects the April margin as the lowest for 2025. It shows monthly margins rising steadily from there to top out at $13.92/cwt in November.

House-Passed Budget Reconciliation Package Advances NMPF Priorities

Posted on by Theresa Sweeney

House Republicans took key steps in May that advanced dairy policy priorities including several key farm bill items, approving President Donald Trump’s budget plan using the reconciliation process.

The full House voted to pass the large fiscal package on May 22 by a vote of 215-214. Reconciliation allows Congress to enact tax and mandatory spending legislation via a simple majority in both the House and Senate, bypassing the filibuster process in the Senate that makes it more difficult for partisan legislation to pass.

The House Agriculture Committee’s portion of the bill, passed by the committee on May 14, included multiple NMPF-backed priorities that would boost the agricultural economy and provide farmers certainty.

Relevant provisions included:

  • Extending the Dairy Margin Coverage (DMC) program through 2031; updating DMC’s production history for participating dairies to be based on the highest production year of 2021, 2022, or 2023; and extending the ability for producers to receive a 25% premium discount for locking in five years of coverage;
  • Providing mandatory funding for USDA to conduct mandatory plant cost studies every two years to provide better data to inform future make allowance conversations;
  • Folding the remaining Inflation Reduction Act conservation dollars into the farm bill baseline, resulting in increased long-term funding for popular, oversubscribed programs like the Environmental Quality Incentives Program;
  • Doubling funding for critical dairy trade promotion programs that return well over $20 in export revenue for every one dollar invested in the programs; and
  • Increasing funding for animal health programs that help to prevent, control, and eradicate animal diseases, such as the outbreak of H5N1 in dairy cattle.

The House Ways and Means Committee also adopted the tax portion of the bill on May 14. The tax package includes critical NMPF-backed language to make the Section 199A tax deduction permanent, which will allow dairy cooperatives to continue either passing the deduction back to their farmer owners or reinvesting it in their cooperatives.

“Whether it’s risk management or tax issues, the stakes are enormous for Congress to get the policy right in this legislation,” said NMPF President & CEO Gregg Doud. “House committees have done good work this week to start major elements of this bill on the right track for dairy farmers and the cooperatives they own.”

The budget reconciliation process now moves forward to the U.S. Senate, where NMPF will push to preserve the agricultural resources and tax policy gains included in the House bill. The Senate is likely to continue the process on the bill when Congress reconvenes in June.

DMC Margin Loses $1.57/cwt in March, Mostly on Lower Milk Price

Posted on by Theresa Sweeney

The monthly Dairy Margin Program margin fell $1.57/cwt to $11.55/cwt in March as the U.S. average all-milk price fell $1.60/cwt to $22/cwt, more than outstripping a small decline in feed costs.

The DMC Decision Tool on the USDA Farm Service Agency website has long projected the monthly margin would reach a bottom for 2025 this spring, but the March downward move outpaced its projections. On the last day of April, the Tool showed the correct milk, corn and soybean meal prices for March, but anticipated a much lower premium alfalfa hay price and showed a projected March margin of $12.29/cwt.  At that time, it also projected the margin would reach a 2025 low of $11.05/cwt in June before rising again.