Tag: dairy margin coverage program

April DMC Margin Up Almost a Dollar over March

Posted on by Rachel Ravencraft

The April margin under USDA’s Margin Coverage Program was $10.54/cwt, $0.97/cwt higher than the month before and marking the second consecutive month this year for which the Program generated no payment at any coverage level. The higher margin was driven by a $1.10/cwt increase in the all-milk price from March and a rise of $0.13/cwt of milk in the April DMC feed cost formula, driven almost equally by small increases in the formula’s three feed components.

At the end of May, the DMC Decision Tool on the USDA website projected there would be no other DMC payments this year other than a possible small one for August. That forecast for the remaining eight months of the year showed a somewhat unusual two-peaked structure for the monthly DMC margins, hitting peaks just above $11.00/cwt in both May and November, with an interim trough of $9.70/cwt in August, and averaging $10.05/cwt for the year.

Getting Word Out Helps Boost DMC Numbers

Posted on by Rachel Ravencraft

After signup rates were lagging previous years for the Dairy Margin Coverage Program, a full-court communications press from NMPF helped push enrollment levels above year-ago levels, with an even higher percentage of dairy farmers participating as a proportion of U.S. dairy operations.

Participation in USDA’s Dairy Margin Coverage program rose to 13,349 this year, up from 12,989 in 2025. Currently, 57 percent of dairy farms are enrolled, compared to 53 percent the previous year.

The gain came after a comprehensive NMPF effort to get the word out, which included staff appearances on RFD-TV, distributed news articles via the National Association of Farm Broadcasters, social media, NMPF’s CEO’s Corner column and President’s Report from Gregg Doud, member alerts and news releases.

This growth highlights that farmers continue to recognize the importance of this safety net and benefit from its support. Congress improved DMC as part of farm-support provisions in last year’s budget reconciliation bill, with an updated production history and an increase in the amount of milk covered under the program.

As that effort was under way, the February margin under USDA’s Margin Coverage Program was generating another month of payments, with a reported margin for the month of $8.46/cwt, up $0.65/cwt from the month before. Farmers who elected coverage at the maximum $9.50/cwt level received a payment of $1.04/cwt for the month.

An $0.80/cwt increase in the all-milk price from January drove the higher margin, which was tempered by $0.15/cwt gain in the February DMC feed cost formula, due primarily to a higher soybean meal price.

The DMC Decision Tool on the USDA website projected at the end of March that February’s payment might be the year’s last, other than a possible small one for March. USDA expected margins to average $10.61/cwt for the year.

DMC Generates $1.69/cwt Payment in January

Posted on by Rachel Ravencraft

The Dairy Margin Coverage Program margin for January was $7.81/cwt, generating a payment of $1.69/cwt for coverage at the maximum $9.50/cwt level.  

The low margin was driven by a $1.50/cwt drop in the all-milk price from December and a rise of $0.11/cwt in the January DMC feed cost formula, primarily due to a higher cost of premium alfalfa hay. 

At the beginning of March, the DMC Decision Tool on the USDA website projected a similarly low margin in February, followed by a margin rebound to well above $10.00/cwt for the remainder of 2026, with an average of $10.57/cwt for the year. 

DMC Signup Ends Feb. 26; NMPF Urges Farmers to Lock in Benefits

Posted on by Rachel Ravencraft

Signup for the Dairy Margin Coverage Program ends Thursday. NMPF is urging farmers to apply for the program as part of a risk management strategy that helps dairy producers weather economic swings.

“Dairy Margin Coverage is an essential part of a dairy farmer’s business resilience,” Gregg Doud, president & CEO of NMPF, said. “Smaller farmers gain important protection against lower margins, while larger farmers gain catastrophic coverage at little or even no cost.

“This signup is the first since the program was reauthorized last year, and it includes coverage improvements as well as a 25% premium reduction for a long-term commitment,” he continued. “Farmers can benefit greatly from participating in a program that has helped thousands of dairies.”

DMC changes made as part of the One Big Beautiful Bill Act passed last year include:

  • An update to production history based on the highest annual milk production level from any one of the 2021, 2022, or 2023 calendar years.
  • 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.

Farmers interested in participating in DMC can complete their paperwork in consultation with their local Farm Service Agency Office. Cooperatives also stand ready to assist.

Signup Underway for Improved DMC as Margins Decline

Posted on by Rachel Ravencraft

With the Dairy Margin Coverage Program entering payment territory, NMPF is pleased that signup for the recently improved program is under way through Feb. 26.

The December margin under USDA’s Margin Coverage Program dropped by $0.62/cwt from November to $9.42/cwt, generating a payment, for the first and only time during 2025, of $0.08/cwt, for farmers insured at the highest $9.50/cwt coverage level. USDA is predicting margins below $9.50/cwt through July and averaging $9.53/cwt for the year. This would be $1.62/cwt lower than the $11.15/cwt the margin averaged in 2025.

“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 permanent 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.

NMPF will keep its members apprised of key developments, with staff available to answer questions as necessary.

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 Lauds Dairy Policy Provisions in House Ag Reconciliation Package

Posted on by Rachel Ravencraft

The National Milk Producers Federation today lauded the inclusion of critical resources in the House Agriculture Committee’s reconciliation proposal that would boost the agricultural economy and provide farmers certainty.

“We commend Chairman GT Thompson and committee members for advancing important investments that will help support and create opportunities for dairy,” said Gregg Doud, president and CEO of NMPF. “We will work with lawmakers to advance these provisions through Congress, knowing that dairy is well-served by what the House Agriculture Committee is approving.”

NMPF is pleased that the bill extends the Dairy Margin Coverage program through 2031, providing dairy producers with much-needed continuity. The package also bases the program’s production history calculation on a farmer’s highest production year out of 2021, 2022, or 2023, an update that better reflects recent on-farm production levels. The bill also funds mandatory USDA dairy processing plant cost surveys every two years, which will better inform future make allowance conversations. Finally, it includes long-term resources for important trade promotion, conservation, research, and animal health programs.

The legislation, which is expected to be approved today by the House Agriculture Committee, will ultimately be folded into a broader budget reconciliation package that will include an extension of current tax policies, among other areas. NMPF supports House Ways and Means Committee language to make the Section 199A tax deduction permanent, which will allow dairy cooperatives to continue to 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,” Doud said. “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.”

October DMC Margin Recedes $0.40/cwt from September Record

Posted on by Rachel Ravencraft

The monthly margin under the Dairy Margin Coverage (DMC) program decreased by $0.40/cwt from September’s record level to $15.17/cwt. The October all-milk price was down $0.30/cwt from September to $25.20/cwt, while the DMC feed cost formula rose again from September, by $0.10/cwt of milk, mostly on a higher price for premium alfalfa hay. 

The end of November dairy and grain futures indicated the DMC margin would average around $11.85/cwt for all of 2024. 

Record DMC margins and relatively high prices come as policy and market developments continue to keep the NMPF/U.S. Dairy Export Council Joint Economics team busy with market analysis and events 

NMPF Senior Director for Economic Research & Analysis Stephen Cain presented a market outlook to the ADPI Risk Management Seminar on Nov. 6 in Chicago and an FMMO and a farm bill update to Texas Farm Bureau virtually on Nov. 7. Will Loux gave an overview of the impact of H5N1 on the market to the Innovation Center Animal Care Committee virtually on Nov. 14.  

NMPF’s Galen Explains Latest Development in Farm Bill Process in Congress

Posted on by Chris Galen

NMPF’s Senior Vice President Chris Galen explains for listeners of Dairy Radio Now how the House and Senate agriculture committees are each now seeking to advance their respective versions of the 2024 Farm Bill.  Galen describes how the measures may affect dairy policy, and what the next steps are for lawmakers this spring on Capitol Hill.

 

NMPF Statement on USDA’s Extended Deadline for Dairy Margin Coverage Signup

Posted on by Theresa Sweeney

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.”

Surging Milk Price Boosts DMC Margin

Posted on by Theresa Sweeney

The January margin under the Dairy Margin Coverage (DMC) program rose just over $2/cwt to $11.54/cwt, fueled by the third-highest ever jump in the U.S. average all-milk price.

A spectacular $2.40 per hundredweight one-month jump in the U.S. average all-milk price in January overpowered a DMC feed-cost calculation that rose only 39 cents in the same period. The monthly milk price gain has only been surpassed in April 2004, when it rose by $2.60/cwt, and June 2020, when it leaped by $4.50 /cwt as part of a price sharp recovery from the onset of the COVID-19 pandemic. That jump returned the price to barely higher than it had been just three months earlier; by contrast, the recent spike capped a series of gains that have pushed the price up by $6.50/cwt over five months.

January’s all-milk price has only been surpassed in five months, all in 2014. Late February dairy and grain futures indicate that feed costs will tend to track milk prices over the next several months to keep the margin from rising much above its January level.

As of February 28, the 2021 DMC program has seen record payments of nearly $1.2 billion to 18,952 enrolled operations, an average of $62,773 per enrolled operation. NMPF urges all dairy farmers who haven’t yet joined DMC to do so. The deadline to sign up for the 2022 DMC program has been extended to March 25. NMPF has a page of resources here for those who may have questions about the program.