Enrollment for Dairy Margin Coverage Program Open

News / Newsline December 21, 2021

Credit: Mark Stebnicki, North Carolina Farm Bureau 

Applications for the 2022 Dairy Margin Coverage program are open. Micheal Clements shares more on what dairy farmers can expect from the program in the new year.

Clements: The American Farm Bureau Federation is reminding dairy farmers that they can sign up now for the 2022 Dairy Margin Coverage program. Farm Bureau Associate Economist Danny Munch says the program provides risk protection to dairy farmers when milk prices are low and feed costs are high.

Munch: It's a voluntary program and administered through FSA, and really pays out payments to farmers given particular coverage levels that they choose. So, going into 2022, we have the Supplemental Dairy Margin Coverage, which is new, and that will actually allow farmers to update their production history from what was the highest marketing's between 2011 and 2013, to 75 percent the difference between 2011, 2013 and 2019.

Clements: The Farm Service Agency also adjusted the underlying calculation for alfalfa, used in the average feed cost calculation.

Munch: It used to be 50 percent premium alfalfa, and now they're accounting for 100 percent premium alfalfa to be more reflective of dairy expenses, and that adjustment will really allow farmers to take advantage of higher payment levels if the change in alfalfa price links to a higher coverage level that they chose.

Clements: Munch says the most recent margin reported by USDA for October was $8.77 per hundredweight.

Munch: This is actually the largest margin since November of 2020. So, a little bit of an improvement in the dairy markets, partially because of a modest decline in corn and soybean meal prices, but also because a little bit of a restriction in supply in the milk markets. Dairy Margin Coverage really helps protect farmers against massive changes in feed costs, which with all that supply disruptions going on right now, it's a really good option for dairy farmers to protect themselves moving forward.

Clements: Learn more on the Market Intel page at fb.org. Micheal Clements, Washington.

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