November’s $20.80 All-Milk price posted in the most recent Agricultural Prices yielded the smallest Dairy Margin Coverage (DMC) payments of the year at 36 cents per hundredweight (cwt.) for farmers who insured milk up to the $9.50 level. While this may have been the lowest indemnity payment in 2021, payments for the farm bill’s signature dairy program have been strong with January-to-November 2021 insurance payments moving past $24,000 for each 1 million pounds of milk covered by the program.
In November, the final feed costs for DMC were $11.66 per cwt. Premium alfalfa hovered near a yearly high at $246 per ton. Meanwhile, corn fetched $5.27 per bushel and soybean meal netted $358.73 per ton. That soybean meal value was the highest price since July. On the income side of the ledger, November’s $20.80 All-Milk price was $1.10 per cwt. higher than one month earlier.
Sign up by February 18
Enrollment for 2022 coverage in the Dairy Margin Coverage program runs through February 18, 2022. Signups take place at local Farm Service Agency (FSA) offices.
The quoted price for alfalfa for 2021 and beyond is based on premium alfalfa hay rather than a 50% level for the premium legume. Also, dairy farmers who expanded production but remain under the 5 million production cap can sign up for Supplemental Coverage. USDA projects this Supplemental Coverage could net $580 million.