USDA announces Dairy Margin Coverage payment triggered | TSLN.com

USDA announces Dairy Margin Coverage payment triggered

The Agriculture Department’s Farm Service Agency (FSA) announced Wednesday that the January 2019 income over feed cost margin was $7.99 per hundredweight, triggering the first payment for eligible dairy producers who purchase the appropriate level of coverage under the new but yet-to-be established Dairy Margin Coverage (DMC) program.

DMC, which replaces the Margin Protection Program for Dairy, is a voluntary risk management program for dairy producers that was authorized by the 2018 farm bill. DMC offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

Agriculture Secretary Sonny Perdue announced last week that sign-ups for DMC will open by mid-June of this year. At the time of sign-up, producers who elect a DMC coverage level between $8 and $9.50 would be eligible for a payment for January 2019.

The announcement appeared to be an attempt to encourage dairy farmers to sign up for the program. House Agriculture Committee Chairman Collin Peterson, D-Minn., has said he is afraid that dairy producers were so disappointed in the previous Margin Protection Program that they won’t sign up for the new, improved program.

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“Congress created the Dairy Margin Coverage program to provide an important financial safety net for dairy producers, helping them weather shifting milk and feed prices. Richard Fordyce, FSA Administrator

“Congress created the Dairy Margin Coverage program to provide an important financial safety net for dairy producers, helping them weather shifting milk and feed prices,” FSA Administrator Richard Fordyce said. “This program builds on the previous Margin Protection Program for Dairy, carrying forward many of the program upgrades made last year based on feedback from producers. We’re working diligently to implement the DMC program and other FSA programs authorized by the 2018 farm bill.”

For a calculation of the benefit, please see link.

–The Hagstrom Report


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