Signed into law in November, the “Further Continuing Appropriations and Other Extensions Act, 2024” provided continuing fiscal year (FY) 2024 appropriations for the USDA and other federal agencies. That included extension of several expiring programs – authorized under the 2018 Farm Bill – through Sept. 30, 2024.
Specific to dairy, the act extended the Dairy Margin Coverage (DMC) program through the end of 2024.
Current DMC and Supplemental DMC participation concludes at the end of 2023. Dairy producers planning to participate in the program in 2024 must sign up with the USDA Farm Service Agency (FSA) and select a coverage level for the year. However, as of mid-December, no enrollment period had been announced.
Contacted by Progressive Dairy, a USDA spokesperson said implementation of the DMC program for 2024 requires a program rule amendment. FSA staff were working on the amendment, anticipating an announcement of enrollment provisions early in calendar year 2024.
There is some lag time available as the 2023 DMC program winds down. The November 2023 DMC/Supplemental program margin and potential indemnity payments were to be announced on Dec. 29. The December 2023 margin and potential indemnity payments are not calculated and announced until Jan. 31, 2024. Looking ahead to 2024, the January 2024 DMC margin will not be calculated until Feb. 29.
Watch for a notice from your FSA office, and follow the Progressive Dairy website for 2024 DMC enrollment information when it becomes available.
As we saw in recent years, using beginning of the year milk and feed price forecasts to determine DMC participation can be risky. It is not likely we’ll see the record-low margins and record-high indemnity payments that occurred in 2023, but markets change.
The DMC decision tool has not yet posted price and margin forecasts for 2024. The USDA’s latest World Ag Supply and Demand Estimates (WASDE) report has lowered milk, corn and soybean meal price projections for the year.
Through October milk marketings, DMC indemnity payments distributed through 10 months of 2023 had already topped $1.27 billion, averaging $74,453 per dairy operation. About 17,059 dairy operations were enrolled in the 2023 DMC program, representing about 74.5% of operations with established production history. All 2023 DMC indemnity payments are subject to a 5.7% sequestration deduction.
