According to USDA’s Farm Service Agency (FSA), the August milk margin triggered the eighth consecutive payment for dairy farmers that earned Dairy Margin Coverage (DMC) for the 2023 program year.
For the month of August, the income over feed margin was predicted to be $6.46 per hundredweight (cwt. ), with expected DMC payments reaching $120 million.
Year to far, including the anticipated August payments, the 17,056 enrolled enterprises have received more than $1.2 billion in much-needed economic assistance, averaging $72,424 per operation. Forecasts for margins imply that there will be more before the conclusion of the calendar year.
At the state level, 639 dairy operations got $54,933,442 for the year, with an average payout of $85,968 per operation. According to FSA, about 65% of the state’s 980 dairy farms with a history of production were registered for the year.
DMC is a voluntary risk management program that protects dairy farmers when the difference between the all-milk price and the average feed price (the margin) falls below a certain cash amount.
The DMC program is due to end on December 31, 2023 under the 2018 Farm Bill, making passage of a new farm bill critical, according to FSA Administrator Zach Ducheneaux.
“While livestock and crop producers alike have been financially impacted by catastrophic natural disaster events, dairy producers’ financial stressors have been compounded by significant market volatilities,” said Ducheneaux.
“Dairy Margin Coverage is a key risk management tool for dairy operations to financially endure the numerous, and often unpredictable uncertainties that adversely impact market prices for milk,” he went on to say.
