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New USDA Program, Other Assistance, About to Kick in for America’s Dairy Industry

Posted by Richard Fordyce, Farm Service Agency in Farming
Jun 20, 2019
A closeup of cows
USDA offers a variety of programs that support America’s dairy farmers. Photo by Lauren Moore, USDA

Each June, we celebrate National Dairy Month! Since 1937, this month has been set aside to mark the importance of the dairy industry and the products it produces to America’s agricultural sector and to hundreds of millions of Americans and consumers around the world.

Many of the country’s 37,000 dairy farms are family-owned, and more than 3 million jobs are supported, with $38 billion in direct wages for workers, by the U.S. dairy industry.

Times are tough for America’s dairy industry. Costs are high, and margins have been squeezed. In fact, the dairy industry is now in its fifth consecutive year of low prices, which – at least in part – prompted more than 2,700 dairy farms to go out of business in 2018 alone.

Dairy Margin Coverage Program

USDA is working to support dairy producers. One way is through the Dairy Margin Coverage (DMC) program, which producers can begin signing up for this week. The signup began Monday and runs through Sept. 20. USDA has partnered with the University of Wisconsin-Madison to provide a DMC decision tool that will help producers make coverage choices that will best benefit their individual dairy operation.

Want to Sign-up?

Through the provisions of the 2018 Farm Bill, dairy producers will be eligible for coverage retroactive to January 1, 2019. It’s expected to be a vast improvement over the former Margin Protection Program for Dairy (MPP-Dairy), with lower premiums.

The DMC program 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. So far this year, DMC payments have triggered in January, February, March and April.

The 2018 Farm Bill also allows dairy producers who had been covered and paid premiums under MPP-Dairy to be eligible for reimbursements. An operation either can receive 50 percent of the reimbursement amount as a cash refund or take 75 percent of the amount as a credit toward premiums for DMC. Producers must make repayment elections by September 20, 2019.

Implementing the 2018 Farm Bill

FSA and other USDA agencies are working diligently to implement the new programs and policies of the 2018 Farm Bill. DMC was the first large implementation effort of FSA because we recognize the importance of making this program available to dairy producers.

Producers interested in learning more about the program should contact their local FSA county office. Additionally, FSA is planning outreach meetings in some local communities to help with sharing information and answering questions on the new program. Learn more on the DMC webpage as well as by listening to this June 17 webinar.

Cows grazing
Dairy producers have until Sept. 20 to enroll in the new Dairy Margin Coverage program. Photo by Lauren Moore, USDA
Category/Topic: Farming