Dairy Margin Coverage (DMC) Making Tool

With the enactment of the Agricultural Act of 2018 (2018 Farm Bill), Congress enhanced the former Margin Protection Program for Dairy Producers (MPP-Dairy) and created the Dairy Margin Coverage (DMC) program. DMC is a voluntary program that makes payments when the national average income-over-feed-cost margin falls below a farmer selected coverage level.

DMC has increased the margin coverage levels to the $9.50 level for tier 1 production up to 5 million pounds while giving dairy operations the ability to cover production history in five percent increments up to 95 percent. For dairy operations who choose to lock-in coverage levels until 2023, a 25 percent discount is applied to the premium fees. For the former MPP-Dairy participants from 2014-2017 who purchased buy-up premiums, the 2018 Farm Bill allows a repayment of premiums paid above the amount of any indemnity received. Additionally, Livestock Gross Margin Program (LGM) participants can retroactively sign up for 2018 MPP-Dairy until May 10, 2019.

The 2019 DMC sign up will open on June 17, 2019. Dairy operations are encouraged to visit their local FSA office and complete a CCC-801 DMC contract, elect a coverage level and pay the $100 administrative fee unless eligible for a waiver.

Payments under MPP-Dairy may be reduced by a certain percentage due to a sequester order required by Congress and issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985. Should a payment reduction be necessary, FSA will reduce the payment by the required amount.

Click here to work through the DMC decision making tool for your farm: https://www.fsa.usda.gov/programs-and-services/farm-bill/farm-safety-net/dairy-programs/dmc-decision-tool/index.