January — $1.51

February — $1.28

March — 65 cents

Those are the first three payments, on a per hundredweight (cwt.), basis for the Dairy Margin Coverage (DMC) program. The results can be seen firsthand by going to the web-based decision tool just released by USDA.

Although sign-up for the new Dairy Margin Coverage (DMC) program does not begin until June 17 at USDA’s Farm Service Agency (FSA) offices, there is some certainty about the first year of the new 2018 Farm Bill program.

With the January 2019 income over feed cost margin announced at $7.99 per cwt., producers who choose to sign up at the $9.50 cwt. coverage level will receive a payment of $1.51 per cwt. on eligible January production. “That January payment will almost cover the entire year’s Tier 1 premium cost of 15 cents per cwt., applicable to the first 5 million pounds of milk enrolled,” noted the University of Missouri’s Scott Brown.

Take a look
“With the sign-up for the DMC program just weeks away, we encourage producers to use this new tool to help make decisions on participation in the program,” said USDA Secretary Sonny Perdue. “Dairy producers have faced tough challenges over the years, but the DMC program should help producers better weather the ups and downs in the industry.”

Premium reimbursements
USDA will be mailing letters to dairy farmers who participated in the Margin Protection Program for Dairy (MPP-Dairy). Those letters should be arriving in dairy farmers’ mailboxes this week.

Dairy producers who paid MPP-Dairy premiums over the 2014 to 2017 period will be eligible to receive reimbursement of a portion of the premium cost in excess of the MPP-Dairy payments that they received. There are two options:

1. They can elect to receive 75 percent of this calculated amount to use as an offset to their premium costs under the DMC program.

2. They can receive 50 percent of the calculated amount in a cash reimbursement.

Learn about all your options
To learn more about the program, Hoard’s Dairyman has assembled a number of articles to help everyone get up to speed on the program. All the articles can be found under Dairy Margin Coverage Program.

To comment, email your remarks to intel@hoards.com.
(c) Hoard's Dairyman Intel 2019
May 6, 2019
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