However, the USDA’s Ag Prices reported that there will be no DMC payments for December milk. The Income Over Feed Costs calculated to be $9.53/cwt., $0.03 above the maximum coverage level of $9.50.
Erick Metzger, general manager of National All-Jersey Inc., based in Reynoldsburg, Ohio, noted that the All-Milk price was reported as $21.80/cwt., $1.00 higher than November. On the feed side of the ledger, alfalfa hay was pegged at $253/ton (+$7.00), corn was $5.47/bu. (+$0.20), and soybean meal was $399.53/ton (+$40.80). “The overall feed costs calculated to be $12.27, up to $0.61 from November,” he said.
For the year, each 1 million pounds of milk insured at the $9.50 level received $23,398.40 after sequestration.
National Milk Producers Federation (NMPF) states that every dairy farmer should sign up for maximum DMC coverage by contacting their local Farm Service Agency (FSA) office by Feb. 18, 2022.
Producers have until February 18, 2022, to enroll in DMC for 2022 production. NMPF points out that this year’s program includes improvements that make the program more valuable than ever, including 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.
“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,” Jim Mulhern, president and CEO of NMPF said. “This year has illustrated just how valuable this program is for those producers that can take advantage of it, and DMC will once again be an essential part of many farmers’ risk management in the coming year. We thank Congress and USDA for making the program stronger and helping dairy farmers in challenging times.”
NMPF’s chief economist, Peter Vitaliano, remarked on an NMPF dairy defined podcast episode earlier this month, stating, “The futures markets look very good at the moment, but there are many months to go. The history of dairy farmers second-guessing the markets, even based on the futures, is not very good. And again, given how inexpensive coverage is, our recommendation continues to be you should sign up for the program.”
For more information on DMC eligibility, coverage levels, Supplemental DMC and how to apply, go to nmpf.org.
