USDA Announces NMPF-Backed DMC Enhancements, 2022 Signup Underway
January 5, 2022
NMPF is urging farmers to sign up for maximum coverage in 2022 under the Dairy Margin Coverage (DMC) program.
This year’s signup, with a deadline of Feb. 18, is accompanied by new enhancements that make the program more valuable than ever for producers seeking protection against unforeseen market risks. NMPF-backed improvements include an enhanced feed cost formula to better reflect the cost of high-quality alfalfa hay, and Supplemental DMC enrollment for many producers whose milk production has increased since 2014.
More than $1.2 billion – a record – in DMC payments are expected to be distributed to dairy producers under the 2021 program, according to USDA data as of Jan. 3.
“Signing up for DMC, which offers cost-effective margin protection for small and medium-sized producers as well as inexpensive catastrophic coverage for larger dairies, is a no-brainer for 2022, especially considering the improvements we fought for in Congress and advocated for at USDA,” said Jim Mulhern, president and CEO of NMPF, in a statement when the program was announced.
DMC is part of a suite of federally backed risk-management tools, including the Dairy Revenue Protection (DRP) program and the Livestock Gross Margin for Dairy Producers (LGM-Dairy) program, which were revamped in the 2018 Farm Bill at NMPF’s urging. DMC resulted from NMPF’s effort to improve inadequate federal margin-protection insurance. LGM-Dairy and DRP were made workable via NMPF’s efforts to remove spending caps and a ban on enrollment in multiple programs, which previously limited their usefulness.
DMC in 2022 will fully incorporate the premium-quality alfalfa price into the DMC feed cost formula, an improvement from the previous structure that used a 50-50 blend between the premium-quality price and the overall average price. USDA also will make retroactive payments to producers using the new formula, dating from January 2020.
Meanwhile, the new Supplemental Dairy Margin Coverage program will enable some producers who are also enrolled in DMC to receive additional payments reflecting increases in their production since 2014 retroactively to January 2021.
More information about the DMC Program, including a webinar detailing this year’s improvements and a Supplemental DMC Q&A, can be found here.