Sept. 13 2021 08:01 AM

Updated September 13, 2021 at 11:30 a.m. CDT

Update from USDA on Monday: "Payment processing resumed Friday. Producers eligible for payments will receive them. Milk and feed prices continue to be volatile and are difficult to predict, unfortunately we had exhausted available funding under the program. We apologize greatly for the delay," USDA Media Relations.

Consistent calls began rolling into our office on Thursday, September 9. Multiple dairymen from different regions of the country shared similar stories of missing payments for July’s Dairy Margin Coverage (DMC) program. Upon calling their local USDA Farm Service Agency (FSA) offices, they were each told that DMC payments were delayed at this time.

Is there truth to this story?


That’s the short answer.

Let’s start with this premise . . . the DMC program is on solid footing as a part of federal legislation passed into law in the most recent farm bill. However, it appears that full funding may not have been released by USDA to FSA to make the July payments. In government language, USDA is trying to resolve an administrative funding apportionment issue that temporarily delayed payments.

This is a temporary glitch. USDA is working quickly to resolve the matter by making the necessary adjustments to release funds. After those procedural actions, payments should be fulfilled.

Largest payments of the year

This delayed payment was easily detectable by dairy farmers participating in the DMC program as July’s payments were the largest of the year. This July’s $5.68 milk-to-feed margin led to a $3.82 per hundredweight (cwt.) payout for farmers buying the maximum $9.50 coverage level in the most recent farm bill’s signature dairy program.

Multiple factors led to these large payouts.

July milk fell from $18.40 to $17.90 per cwt. On the feed side of the equation, corn climbed 12 cents to reach $6.12 per bushel and blended alfalfa hay rose by $2 to reach $216.50 per ton. Both feed values were highs for the year.

The only bright spot?

Soybean meal slid to $365.23 per ton, down from January’s $439.24.

With these market factors in mind, farmers who signed up for DMC insurance coverage certainly hope that USDA quickly resolves its accounting matters and issue July payments forthwith.

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(c) Hoard's Dairyman Intel 2021
September 13, 2021
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