DMC is a voluntary risk management programme that protects dairy farmers when the margin between the all-milk price and the average feed price falls below a certain amount of money that the farmer chooses.
Zach Ducheneaux, administrator of the Farm Service Agency (FSA), said, “We know this is a busy time of year with many competing priorities, so we’ve extended the DMC enrollment deadline to make sure every producer who wants coverage for 2023 has a chance to sign up for the programme.”
“Early estimates suggest that DMC payments will probably happen for the first eight months of 2023. We all know that markets change, sometimes quickly and sometimes without any warning, so now is the time to make sure your business is protected. Please don’t throw away this second chance.”
Nearly 18,000 businesses that signed up for DMC for 2022 have received a total of $76.3 million in margin payments for the months of August and September. Risk coverage through DMC is a relatively cheap investment, costing $0.15 per hundredweight for $9.50 of coverage.
DMC offers different levels of coverage, including one that is free for producers (except for a $100 administrative fee). If they ask, farmers and ranchers who are just starting out, have limited resources, are socially disadvantaged, or are veterans of the military do not have to pay the administrative fee. Producers can use the online dairy decision tool to figure out what level of DMC coverage is right for their dairy operation.
Supplemental DMC
Supplemental DMC was started by the USDA in 2021. It gave $42.8 million in payments to help small and medium-sized dairy farms that had grown over the years but hadn’t been able to enrol the extra production. There is also supplemental DMC for 2023. The deadline to sign up for Supplemental DMC for 2023 has also been moved to January 31.
For the years 2021, 2022, and 2023, you can get extra DMC coverage. Dairy farms that are eligible and have a history of producing less than 5 million pounds can enrol additional pounds.
For producers who signed up for Supplemental DMC in 2022, the extra coverage will be added automatically to their 2023 DMC contract, which already had a history of supplemental production.
If a producer didn’t sign up for Supplemental DMC in 2022, they can do so now. Before signing up for DMC in 2023, producers should finish signing up for Supplemental DMC. To sign up, producers will need to tell FSA how much milk they actually sold in 2019. This is how FSA figures out how long they have been making milk.
DMC Payments
FSA will keep using updated feed and premium hay costs to figure out DMC payments. This will make the programme more like what dairy farmers actually spend. The new calculations for feed use 100% premium alfalfa hay instead of 50%.
Visit the DMC website or call your local USDA Service Center for more information.
