2027 Dairy Margin Coverage Enrollment: Oct. 5 to Dec. 18, 2026

At a Glance

• Enrollment opens: Monday, October 5, 2026.
• Enrollment closes: Friday, December 18, 2026.
• Coverage period: January through December 2027.
• Where to enroll: your local FSA county office.
• Administrative fee: $100, due by December 18, 2026, unless the operation qualifies for a fee waiver.
• Premium due: in full no later than September 1, 2027.
• Payment reduction: DMC payments made in fiscal year 2027 are reduced 5.7% by federal sequestration.
• Program changes for 2027: none.
• Decision tool: dmc.bozic.io.

What do I need to do?

• Visit the FSA office between October 5 and December 18, 2026.
• Certify that the operation commercially markets milk, sign a 2027 contract, and pay the $100 administrative fee.
• Coverage level, coverage percentage, and the 25% premium discount carry forward. No new coverage decisions are needed.
• Coverage for 2027 does not take effect until the 2027 contract is signed. An operation that is marketing milk and holds a lock-in contract owes the 2027 premium whether or not it signs the 2027 contract (7 CFR §§ 1430.404(e), 1430.413(b)).

• Visit the FSA office between October 5 and December 18, 2026.
• Choose a 2027 coverage level and coverage percentage, sign a 2027 contract, and pay the $100 administrative fee.
• The multi-year coverage lock-in for 2026 through 2031 and its 25% premium discount are not available. The regulation required that election during the 2026 enrollment period.

• Submit a DMC contract within 60 days of the date the operation first commercially markets milk, or during the October 5 to December 18 window if the operation is already marketing milk.
• Bring milk marketing records so FSA can establish a production history.
• Choose annual coverage, or lock in coverage from the first available year through 2031 at the 25% premium discount. The regulation extends the lock-in to operations that did not exist during the 2026 enrollment period and so could not elect it then (7 CFR § 1430.407(j)).

What changed for 2027

There are no program changes for 2027 beyond the enrollment dates. USDA announced no changes to coverage levels, premium rates, the Tier 1 and Tier 2 limits, production history rules, the administrative fee, or the margin formula (USDA FSA, 2026a). The rules in place for 2026 carry into 2027. The enrollment window is the main practical difference. The 2026 window ran from January 12 through February 26, 2026 (USDA FSA, 2026b). The 2027 window opens and closes in the fall of 2026, before the coverage year begins.

The current rules date to the 2025 budget reconciliation law, Public Law 119-21, which reauthorized DMC through 2031. USDA now refers to this law as the Working Families Tax Cuts Act. Beginning in 2026, the law raised the Tier 1 limit from 5 million to 6 million pounds, reset production histories, and created the 2026 through 2031 lock-in option (USDA FSA, 2026a, 2026c).

Can I update my production history?

No general update is available for 2027. Production history for an operation that marketed milk on or before January 1, 2023, is its highest annual milk marketings in 2021, 2022, or 2023. This applies whether the operation first enrolls in 2026 or in 2027. An operation that began marketing milk after January 1, 2023, has its history set from actual marketings adjusted for seasonality or from an estimate based on herd size (7 CFR § 1430.405).

A limited exception exists. An operation may receive one upward adjustment during the contract term when a family member joins through an intergenerational transfer and the operation adds cows. The adjustment carries eligibility and documentation requirements, and FSA must be notified within 60 days of the transfer (7 CFR § 1430.405(f)). Production history also follows an operation that relocates or passes to a spouse, child, or heir (7 CFR § 1430.405(d)).

How DMC works

Dairy Margin Coverage is a voluntary federal program that pays a dairy operation when the national margin between the U.S. all-milk price and a formula feed cost falls below the coverage level the operation selects. The feed cost is calculated from national prices for corn, soybean meal, and alfalfa hay. FSA calculates the margin each month. When the margin falls below the selected coverage level, the payment equals the difference multiplied by the operation’s covered production for that month (7 CFR § 1430.409).

DMC payments are subject to federal budget sequestration. The Office of Management and Budget set the reduction for nonexempt nondefense mandatory programs at 5.7% for fiscal year 2027, which runs from October 1, 2026, through September 30, 2027 (Office of Management and Budget [OMB], 2026). The same 5.7% rate applied to DMC payments in fiscal years 2024 through 2026 (OMB, 2024, 2025; USDA FSA, 2024). Payments on 2027 margins issued after September 30, 2027, fall in fiscal year 2028, and OMB will set that rate in its next sequestration report.

The program uses one national margin. It does not measure an individual farm’s milk price or feed cost. DMC participants may also use Dairy Revenue Protection and Livestock Gross Margin for Dairy, which are administered by the USDA Risk Management Agency (USDA FSA, 2026b).

Coverage Choices

• Coverage level: $4.00 to $9.50 per hundredweight in $0.50 increments.
• Coverage percentage: 5% to 95% of production history in 5% increments.
• Tier 1: the first 6 million pounds of covered production history, with coverage up to $9.50.
• Tier 2: covered production history above 6 million pounds, with coverage up to $8.00. A Tier 1 level of $4.00 through $8.00 applies to Tier 2 automatically. An operation that chooses $8.50 through $9.50 for Tier 1 selects any Tier 2 level from $4.00 through $8.00.
• Catastrophic coverage: the $4.00 level carries no premium.
• Administrative fee: $100 per year at any coverage level. Limited resource, beginning, veteran, and socially disadvantaged farmers and ranchers are exempt (7 CFR § 1430.406).

Premium rates per hundredweight of covered production appear below, from the highest coverage level to the lowest (7 CFR § 1430.407(e)).

Illustration: An operation with 5 million pounds of production history that covers 95% at $9.50 has 47,500 cwt of covered production. The annual Tier 1 premium at $0.150 per cwt is $7,125, or $5,344 under the lock-in discount, plus the $100 administrative fee.

For background on the program and margin history since 2019, see Polzin (2026). Program information and monthly margins are posted at fsa.usda.gov/dmc.