Dairy producers are currently hopeful for more favorable milk prices in the upcoming year to enhance profitability. However, the forecast for milk prices in the first quarter appears less than optimistic, leading producers to consider alternative strategies. One such strategy is relying on the DMC program, which proved beneficial in 2023, to yield substantial payouts in the upcoming year.
The October milk marketing report revealed that DMC indemnity payments, distributed over the first ten months of 2023, have surpassed $1.27 billion. This figure translates to an average of $74,453 per dairy operation. The 2023 DMC program saw the participation of approximately 17,059 dairy operations, accounting for about 74.5% of operations with an established production history. It is important to note that all 2023 DMC indemnity payments were subjected to a 5.7% sequestration deduction.
In a notable development earlier this year, the continuation of the current Farm Bill through Sept. 30, 2024, was enacted. This extension ensures the stability of programs like the DMC for an additional year. However, dairy producers are currently awaiting further details on the 2024 DMC enrollment process.
The following table is an overview of the current situation and future expectations surrounding the DMC program.
| Aspect | Details |
| 2024 Enrollment Announcement | Pending; no official date released for DMC program enrollment in 2024. |
| Producer Expectations | Hoping for stronger milk prices; reliance on DMC payouts due to less optimistic Q1 milk price outlook. |
| 2023 DMC Performance | – Over $1.27 billion in indemnity payments. – Average of $74,453 per dairy operation. – 17,059 dairy operations enrolled (74.5% of those with production history). – Payments subject to 5.7% sequestration deduction. |
| Advocacy for DMC Enrollment | Katie Burgess of Ever.Ag recommends continued participation due to its effectiveness in tight margin periods. |
| DMC Program Design | Allows producers to choose a margin between milk price and average feed cost for assistance triggers. |
| 2018 Farm Bill | Authorized the DMC program to protect producers when milk price-feed cost margin falls below selected trigger. |
| FSA Administrator’s View | Zach Ducheneaux describes DMC as a key tool for managing risks due to market uncertainties. |
| Industry Analyst’s View | Sarina Sharp notes the dairy safety net partially offsets dairy farm balance sheet losses. |
| Farm Bill Extension | Extended through Sept. 30, 2024, ensuring DMC program’s continuity for another year. |
Find more information and details about DMC payments and Farm Bill extension updates on our website.
