USDA Opens DMC Enrollment, Expands Enrollment Coverage

The United States Department of Agriculture (USDA) has opened enrollment in the Dairy Margin Coverage (DMC) program and expanded the program to help dairy farmers better protect their farms by enrolling additional production. This application period—running from December 13, 2021 to February 18, 2022—allows farmers to get another year of coverage through this important safety net program and additional help through the new Supplemental DMC.

Additional DMC will provide $580 million to better assist small and medium sized dairies that have increased production over the years but were unable to register the additional production. Now they can receive retroactive payments for that additional production.

USDA’s Farm Service Agency (FSA) has also updated how feed costs are calculated, making the program more in line with dairy farmers’ actual spending.

Additional DMC enrollment
Eligible dairies with an established production history of less than £5million will be able to tender additional pounds based on a formula that uses 2019 actual milk marketing, which will result in additional payments. Farmers will be required to provide FSA with their milk marketing statement for 2019.

The additional DMC coverage applies to the calendar years 2021, 2022 and 2023. Participating dairies with by-production can receive retroactive payments for 2021 in addition to payments based on their established production history.

Additional DMC requires a revision of a farmer’s 2021 DMC contract and must occur prior to enrollment in DMC for the 2022 program year. Farmers may revise 2021 DMC contracts and then request DMC for 2022 by contacting their local USDA Service Center.

DMC 2022 registration
Following any revisions to 2021 DMC contracts for additional DMC, farmers will be able to apply for 2022 coverage. DMC provides eligible dairy farmers with risk management coverage that pays farmers when the difference between milk price and feed cost falls below a certain level. So far in 2021, payments for January through October have been activated for more than $1 billion.

For DMC enrollment, farmers must certify to FSA that the company markets milk commercially, sign all required forms, and pay the $100 administrative fee. The fee is waived for farmers deemed resource-limited, novice, socially disadvantaged, or a military veteran. To determine the appropriate level of DMC coverage for a specific dairy farm, farmers can use the online dairy decision tool.

Feed cost updates
USDA is also changing the DMC feed cost formula to better reflect the true costs dairy farmers pay for high-quality alfalfa hay. FSA calculates payments with 100% premium alfalfa hay instead of 50%. The modified feed cost formula ensures that the DMC payments better reflect the dairy farmer’s actual expenses.

Extra dairy help
The announcement is part of a broader package to help the dairy industry respond to the pandemic and other challenges. USDA is also amending the Dairy Indemnity Payment Program (DIPP) regulations to add provisions for compensating cows that are unlikely to be able to be placed on the market for an extended period of time, for example due to per- and polyfluoroalkyl substances.

FSA also worked closely with the USDA’s Natural Resources Conservation Service to provide assistance through the Environmental Quality Incentives Program and other conservation programs.

Other recent dairy announcements include $350 million through the Pandemic Market Volatility Assistance Program and $400 million for the Dairy Donation Program.

Additional details about these changes to DMC and DIPP can be found in a line to be published soon in the federal registry. This line also included information about the new Oriental Fruit Fly program, as well as changes to FSA conservation programs. A copy of the rule is available here.

More information
For more information or to participate in DMC or DIPP, farmers should contact their localUSDA Service Center. Service Center employees will continue to work with farmers and ranchers via telephone, email and other digital tools. Due to the pandemic, someUSDA Service Centersare accessible to limited visitors. Farmers should contact their service center to arrange a face-to-face or telephone appointment.

More information regarding the USDA response and assistance to farmers and ranchers can be found at:farmers.gov/coronavirus.