Tag: Dairy DMC program

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.  

House Ag Committee Tackles Farm Bill; NMPF’s Bleiberg Outlines What’s in It

Posted on by Chris Galen

NMPF’s Executive Vice President Paul Bleiberg explains for listeners of Dairy Radio Now what’s in the Farm Bill draft for dairy farmers as the House Agriculture Committee votes on May 23. Bleiberg describes how the measure handles the economic safety net for farmers, and assesses the prospects for the farm bill measure after this spring on Capitol Hill.

USDA Announces NMPF-Backed DMC Enhancements, 2022 Signup Underway

Posted on by Theresa Sweeney

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.