Dairy farmers have a tight deadline to protect profits. They have until Sept. 20 to sign up for Dairy Margin Coverage at their local USDA Farm Service Agency office.
The protected profit margin is the difference between national milk prices and national feed costs. University of Missouri dairy economist Joe Horner urges enrollment.
“Dairy Margin Coverage proves popular,” Horner says. More than 60 percent of Missouri producers joined since enrollment started June 17.
“Go sign up,” he says. “You just have to show up and sign up.”
In the 2018 farm bill, Dairy Margin Coverage (DMC) replaced the Margin Protection Program for Dairy. The old plan had gained few participants. DMC has proved easier and more attractive with 2019 prices.
“It’s a no-brainer for most farmers producing less than 5 million pounds of milk,” Horner says. “DMC helps manage ups and downs of prices.”
So far, milk margins have been tight this year. One appeal of DMC: It’s retroactive to Jan. 1, 2019. “Payments have already triggered January through July for the $9.50 margin,” Horner says.
“Just go enroll for $9.50 margin insurance,” he adds.
The plan is flexible. Farmers can protect from 5 percent to 95 percent of their production.
DMC does require compliance in some other government programs. Participating dairy farms must protect highly erodible land and wetlands.
The University of Wisconsin developed a computer app to help farmers figure a strong financial safety net. FSA offices have access to that tool.
Farmers also get help from regional MU Extension dairy specialists. Contact them through your county extension center.
Across the country, dairy farms have been hard hit financially. “In times of volatile prices, margin protection is needed,” Horner says.
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