DMC Program 2024 Highlights
Enrollment Opens for 2024 Dairy Margin Coverage Program on February 28
Objective: Risk management for dairy producers
Enrollment Period: February 28, 2024, to April 29, 2024
Payment Initiation: As early as March 4, 2024, for January 2024 payment triggers
2024 Adjustments: A “one-time adjustment” to established production history. Adjustment will combine previously established supplemental production history with DMC production history for those dairy operations that participated in Supplemental Dairy Margin Coverage during a prior coverage year. The aim is to provide a more accurate representation of production.
2023 Highpoints: Triggered payments in 11 months, with unprecedented low margins in two months.
Overview of 2024 DMC Enrollment Period
The U.S. Department of Agriculture (USDA) has announced the opening of the enrollment period for the Dairy Margin Coverage (DMC) program for 2024. Dairy producers nationwide are invited to enroll starting February 28, 2024. This safety net program aims to offer financial assistance by triggering payments when income over feed cost margins fall below selected coverage levels. The deadline for enrollment is April 29, 2024, with the potential for eligible payments to commence as early as March 4, 2024, for payments triggered in January 2024.
2023 DMC Program: A Historic Year of Risk Management for Dairy Producers
The DMC program serves as a voluntary risk management mechanism, designed to protect dairy producers against the disparity between the all-milk price and the average feed cost. Payments are initiated when this margin drops below a producer-selected threshold. In 2023, the program was activated in 11 of the 12 months, with two months seeing margins fall below the catastrophic level of $4.00 per hundredweight, a first in the program’s history.
Regulatory Adjustments and Enhancements for 2024
The 2024 Dairy Margin Coverage (DMC) program will have coverage starting retroactively from January 1. The program’s update to production history aims to more accurately represent the current production levels of dairy farms producing under 5 million pounds annually by adjusting their production history.
For the 2024 enrollment period, dairy farms that were enrolled in DMC from 2021 through 2023 and had previously established supplemental production history are able to combine their supplemental production history with their existing base to form a revised one-time adjusted base production history. Farms that had enrolled in 2023 with a multiyear, locked-in contract will maintain their eligibility for lock-in contracts through the end of the 2024 year. Those with existing lock-in agreements, or those wishing to either continue with or switch to an annual contract for 2024, are required to sign up within the designated enrollment period. These details are summarized below:
Summary of the 2024 Dairy Margin Coverage (DMC) program | |
Enrollment Period | February 28, 2024, to April 29, 2024 |
Effective Beginning Coverage Date | Retrospective from January 1, 2024 |
Eligibility for 2024 Enrollment | Dairy farms previously enrolled in DMC. |
Lock-in Contract Eligibility | Farms enrolled in 2023 with a multiyear, locked-in contract maintain eligibility through the end of 2024, along with access to reduced premium rates for 2024 coverage. |
Contract Options for 2024 | Farms with existing lock-in agreements, or those wishing to continue with or switch to an annual contract for 2024, must sign up within the designated enrollment period. |
“One-time Adjustment” to Production History Mechanism | |
If: | The farm was previously enrolled in the DMC program, and |
If: | The farm has previously established production history, and |
If: | The farm has previously established supplemental production history |
Then: | Their supplemental production history will be combined with their existing base production history to form a revised one-time adjusted base production history. |
The margin for January 2024 is scheduled to be disclosed on February 29, with subsequent payment distributions planned for as early as March 4.
Views of FSA Administrator
FSA Administrator Zach Ducheneaux emphasized the DMC program’s importance as a risk mitigation instrument, noting that over $1.2 billion in payments were disbursed to producers in 2023. He remarked on the market’s unpredictability and the program’s affordability and effectiveness in providing security for dairy producers.
Coverage Options and Premiums for 2024
The DMC program for 2024 includes multiple coverage levels, with a no-cost option available (excluding a $100 administrative fee, which is waived under specific conditions).
Dairy operations interested in the DMC program or seeking further details on available risk management tools are encouraged to contact their local crop insurance agent or visit the USDA FSA website for more information and resources. The information can be reached at:
- www.fsa.usda.gov/programs-and-services/dairy-margin-coverage-program/index
- Dairy Margin Coverage Program (usda.gov)
- www.farmers.gov/working-with-us/USDA-service-centers
Additional Risk Management Tools
In addition to the DMC, the USDA offers further risk management solutions for dairy producers, including the Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) Dairy plans. These plans are designed to protect against declines in milk revenue and market losses, respectively. More Information related to programs can be reached at: