Dairy farmers have until April 29 to enroll in 2024 Dairy Margin Coverage, an important safety net program offered through the U.S. Department of Agriculture (USDA) that provides farmers with price support to help offset milk and feed price differences.

USDA’s Farm Service Agency (FSA) revised the regulations for DMC to allow eligible dairy operations to make a one-time adjustment to established production history. This adjustment will be accomplished by combining previously established supplemental production history with DMC production history for those dairy operations that participated in Supplemental Dairy Margin Coverage during a prior coverage year.

DMC has also been authorized through calendar year 2024. Congress passed a 2018 Farm Bill extension requiring these regulatory changes to the program.

“We encourage producers to enroll in this important safety net program. In reviewing 2023 margins and the more than $1.2 billion in Dairy Margin Coverage payments issued to producers, Dairy Margin Coverage is proven to be a program to reduce risk for our dairy producers,” FSA Administrator Zach Ducheneaux said. “If 2023 taught us anything, it’s that we honestly have no idea what will happen in the market in any given year. Producers who took advantage of this affordable risk management tool for the 2023 program year, were able to mitigate some financial impacts on their operations. At $0.15 per hundredweight for $9.50 coverage, risk protection through Dairy Margin Coverage is a relatively inexpensive investment in a true sense of security and peace of mind.”

DMC is a voluntary risk management program that offers protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer.

In 2023, DMC payments triggered in 11 months including two months, June and July, where the margin fell below the catastrophic level of $4.00 per hundredweight, a first for DMC or its predecessor Margin Protection Program.

2024 DMC coverage and premium fees
FSA revised DMC regulations to extend coverage for calendar year 2024, which is retroactive to Jan. 1, 2024, and to provide an adjustment to the production history for dairy operations with less than 5 million pounds of production.

In previous years, smaller dairy operations could establish a supplemental production history and receive Supplemental Dairy Margin Coverage.

For 2024, dairy farmers can establish one adjusted base production history through DMC for each participating dairy operation to better reflect the operation’s current production.

For 2024 DMC enrollment, dairy operations that established supplemental production history through Supplemental Dairy Margin Coverage for coverage years 2021 through 2023 will combine the supplemental production history with established production history for one adjusted base production history.

For dairy operations enrolled in 2023 DMC under a multi-year lock-in contract, lock-in eligibility will be extended until Dec. 31, 2024. In addition, dairy operations enrolled in multi-year lock-in contracts are eligible for the discounted DMC premium rate during the 2024 coverage year. To confirm 2024 DMC lock-in coverage or opt out in favor of an annual contract for 2024, dairy operations having lock-in contracts must enroll during the 2024 DMC enrollment period.

DMC offers different levels of coverage, even an option that is free to farmers, minus a $100 administrative fee. The administrative fee is waived for dairy farmers who are considered limited resource, beginning, socially disadvantaged or a military veteran.

To determine the appropriate level of DMC coverage for a specific dairy operation, producers can use the online dairy decision tool.

DMC payments
DMC payments are calculated using updated feed and premium hay costs, making the program more reflective of actual dairy farmer expenses. These updated feed calculations use 100% premium alfalfa hay.

More information
USDA also offers other risk management tools for dairy farmers, including the Dairy Revenue Protection (DRP) plan that protects against a decline in milk revenue (yield and price) and the Livestock Gross Margin (LGM) plan, which provides protection against the loss of the market value of milk minus the feed costs. Both DRP and LGM livestock insurance policies are offered through the Risk Management Agency. Farmers should contact their local crop insurance agent for more information.

For more information on DMC, visit the DMC webpage or contact your local USDA Service Center.