Dairy producers who obtained Dairy Margin Coverage (DMC) for the 2023 program year can expect to receive their eighth consecutive payment, USDA’s Farm Service Agency announced.
The August milk margin triggered the payment, with that month’s income over feed margin at $6.46 per hundredweight. Projected August DMC payments total around $120 million.
So far this year, dairy producers have received more than $1.2 billion in economic support for 2023 and margin forecasts indicate more assistance is likely to come before the end of the calendar year, FSA said.
“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,” FSA Administrator Zach Ducheneaux said in a statement.
“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,” Ducheneaux said.
A voluntary risk management program, DMC offers protection to dairy producers when the difference between the all-milk price and the average feed price falls below a certain dollar amount selected by the producer.
In addition to DMC, dairy producers also have access to the Milk Loss Program (MLP) and the Organic Dairy Marketing Assistance Program (ODMAP).
MLP covers milk that was dumped or removed, without compensation, from the commercial milk market due to qualifying weather events and the consequences of those weather events that inhibited delivery or storage of milk during calendar years 2020, 2021 and 2022.
Covered consequences include power outages, impassable roads and infrastructure losses.
ODMAP aims to help dairy producers with marketing costs to mitigate market volatility, higher input and transportation costs and unstable feed supply and prices that have created unique hardships in the organic dairy industry.
A second round of $5 million in ODMAP payments was recently announced by FSA, bringing total payments to $20 million.
