Enrollment for the Dairy Margin Coverage (DMC) program for the 2025 coverage year is set to begin Jan. 29 and will remain open through March 31.
The announcement came after the 2018 Farm Bill was extended for a second time with the narrow passage of the American Relief Act on Dec. 21, 2024. The extension provides continuation of key farm safety net programs, such as DMC, to prevent marketplace disruption from the farm level and beyond. (Read: Government shutdown averted, farm bill extended)
Coverage for the 2025 program starts as low as 15 cents per hundredweight with a $100 administrative fee. The fee is waived for dairy producers who are considered limited resource, beginning, socially disadvantaged or a military veteran.
“Our safety net programs provide critical financial protections against commodity market volatilities for many American farmers, so don’t delay enrollment,” said USDA Farm Service Agency (FSA) Administrator Zach Ducheneaux in a Jan. 13 press release. “… and at 15 cents per hundredweight for 9.50 dollar coverage, risk protection through Dairy Margin Coverage is a relatively inexpensive investment in a true sense of security and peace of mind.”
Since 2019, the DMC program has served as a voluntary risk management program that offers protection when the difference between the milk prices and feed costs falls below a selected margin. Prior to enrollment for the 2024 program year, revised regulations and a one-time opportunity for production history adjustment fine-tuned the risk management program.
While some years the margins are beneficial for dairy producers and the program is seldom used, as was the case for 2024, in other years, the program is critical for a farm business. In 2023, for example, DMC paid out more than $1.2 billion in payments to 17,130 enrolled operations as margins consistently fell below coverage levels throughout the year, even surpassing catastrophic levels in June and July.
Payments are calculated using updated corn, soybean meal and premium hay costs as well as the all-milk price announced each month. Forecasts for 2025 are predicting margins in the $13-$14 range, given expected lower feed costs and higher milk prices, with a yearly average of $13.84 per cwt. Yet, it’s too soon to say for certain as markets do change.
Dairy producers can submit applications to their local USDA FSA office to secure coverage.
