FSA News - Lone Star State Edition: February 2022 Page: 6
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Deadline Extended to Enroll in 2022 Dairy Margin
Coverage and Supplemental Dairy Margin
Coverage
USDA has extended the deadline to enroll in Dairy Margin Coverage (DMC) and
Supplemental Dairy Margin Coverage (SDMC) for program year 2022. The deadline to
apply for 2022 coverage is now March 25, 2022. As part of the Biden-Harris
Administration's ongoing efforts to support dairy farmers and rural communities, USDA's
Farm Service Agency (FSA) opened DMC and SDMC signup in December 2021 to help
producers manage economic risk brought on by milk price and feed cost disparities.
Enrollment for 2022 DMC is currently at 55% of the 2021 program year enrollment.
Producers who enrolled in DMC for 2021 received margin payments each month, January
through November for a total of $1.2 billion, with an average payment of $60,275 per
operation.
The DMC program, created by the 2018 Farm Bill, offers reasonably priced 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.
Supplemental DMC will provide $580 million to better help small- and mid-sized dairy
operations that have increased production over the years but were not able to enroll the
additional production. Now, they will be able to retroactively receive payments for that
supplemental production.
After making any revisions to 2021 DMC contracts for Supplemental DMC, producers can
sign up for 2022 coverage. DMC provides eligible dairy producers with risk management
coverage that pays producers when the difference between the price of milk and the cost
of feed falls below a certain level. So far in 2021, DMC payments have triggered for
January through November for more than $1 billion.
For DMC enrollment, producers must certify with FSA that the operation is commercially
marketing milk, sign all required forms and pay the $100 administrative fee. The fee is
waived for farmers who are considered limited resource, beginning, socially
disadvantaged, or a military veteran. To determine the appropriate level of DMC coverage
for a specific dairy operation, producers can use the online dairy decision tool.
USDA has also changed the DMC feed cost formula to better reflect the actual cost dairy
farmers pay for high-quality alfalfa hay. FSA now calculates payments using 100%
premium alfalfa hay rather than 50%. In December 2021, following publication of the new
feed cost policy, $102 million was paid to producers as a result of the revised high quality
alfalfa feed cost formula.
The amended feed cost formula will make DMC payments more reflective of actual dairy
producer expenses and DMC payments. Higher DMC feed cost calculations due to the
premium alfalfa adjustment could more frequently trigger DMC indemnity payments for
dairy operations having DMC coverage in 2022.6
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United States. Farm Service Agency. Texas State Office. FSA News - Lone Star State Edition: February 2022, periodical, February 2022; College Station, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1486802/m1/6/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.