Dairy Margin Coverage

 

DMC offers a dairy margin protection plan which provides payments to dairy operations when the difference between the all-milk price and the average feed cost fall below a certain, producer selected, dollar amount. Producers will be eligible for a basic level of margin protection for a small administrative fee and be able to purchase higher coverage with a premium fee. The Secretary of Agriculture (Secretary) will use administrative fees collected to cover administrative costs incurred to carry out the DMC program.

Active 10.127 Farm Service Agency, Department of Agriculture C - Direct Payments For Specified Use Not applicable. Agriculture Improvement Act of 2018, Title 1, Part Subtitle D - Dairy Margin Coverage and Other Dairy Related Provisions, Section 1401 - 1410, Public Law 115-334 Not applicable. The ultimate benefit of the DMC-Dairy program will help protect farm equity and reduce financial losses that occur during times of low margins. To participate in the DMC program, an eligible dairy operation must have a production history determined for the dairy operation; register to participate during a signup announced by the Farm Service Agency (FSA); pay a $100.00 administrative fee annually during the duration of the DMC-Dairy program. An exemption of the administrative fee is applicable for those eligible that include limited resource, socially disadvantaged, beginning, and veteran farmer. Participants will select a coverage level from $4.00 to $9.50 cwt, in $.50 increments, for dairy operations of more than 5 million pounds. They will select a coverage at the Tier 2 level if they selected a Tier 1 coverage of $8.50, $9.00, and $9.50. Additionally, the dairy operation will select a coverage percentage of dairy operations production history ranging from 5 percent to 95 percent. For 2019, participating dairy operations have the option to lock-in coverage levels until 2023 and receive a 25 percent discount in their premium fees. For an existing dairy operation FSA will determine the production history from the highest of the 2011, 2012, and 2013 calendar years. For a new dairy operation ( in operation less than one year), FSA will determine the production history by either the volume of the actual milk marketing for the months the participating dairy operation has been in operation extrapolated to a yearly amount or an estimate of the actual milk marketing of the participating dairy operation based on the herd size of the participating dairy operation relative to the national rolling herd average data published by USDA. For a dairy operation that started commercially producing milk on or after January 1, 2014 but on or before January 1 of the previous year, the dairy operation will select the total milk marketings for one year to determine a production history. All dairy operations in the U.S. are eligible to participate in the DMC program to receive margin protection payments. A dairy operation must produce milk from cows in the U.S. and must be commercially marketing milk produced at the time of enrollment and continue to market milk for the duration of the program. A dairy operation may participate in the DMC program or the Livestock Gross Margin for Dairy (LGM-Dairy). LGM-Dairy is operated by the Risk Management Agency of the U.S. Department of Agriculture (USDA). For 2019, the 2018 Farm Bill allowed 2018 LGM participants the opportunity to retroactively enroll in the 2018 MPP-Dairy program. Additionally, the 2018 Farm Bill authorized repayment of premiums paid by dairy operations from 2014-2017 by year, above the amount of any indemnity paid. Dairy operations had the choice to take the 50 percent of the premium amount as a direct cash payment or take 75 percent of the repayment as credit for future DMC premiums. Preapplication coordination is not applicable. 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. A dairy operation must submit an accurate and complete contract to participate during the application period. The contract is prescribed by the Commodity Credit Corporation (CCC). Producers may obtain such contract in person, by mail, or by facsimile from any county FSA office. The form may be downloaded at http://www.sc.egov.usda.gov. Contract offers must be received at FSA by the close of business on the last day of the open enrollment period. An eligible dairy operation must complete and submit a contract; agree with all terms and conditions in the contract; comply with instructions issued by or for CCC; provide proof of milk production commercially marketed by all persons in the dairy operation; and provide any other supporting documentation to any county FSA office. Producers must certify to accuracy and truthfulness of the information in their contracts and supporting documentation Contact the headquarters or regional location, as appropriate for application deadlines From 1 to 15 days. Not applicable. More than 180 days. DMC participants are required to enroll annually or opt out for a year. Not applicable. Milk is produced in all 50 states and the maintenance and expansion of existing markets for dairy are vital to the welfare of milk producers in the United States (U.S.). The dairy industry has experienced dramatic structural changes at all levels of the marketing channel that have directly affected milk prices, dairy product sales, farm incomes, and other direct aspects of dairy profitability and volatility. Low margins have been a producer complaint for some time. In addition, low prices, high production costs, and oversupply have been issues for the dairy industry in recent years. To address these concerns, DMC was included in P.L. 115-334 to replace existing dairy price and income support programs. The DMC program is much like an insurance program in that the dairy operation selects a level of coverage, and pays a premium based on the amount of coverage (and an administrative fee). As is customary with other insurance or insurance-like programs both agricultural and otherwise, the regulations only provide for coverage prospectively and contemplated that a party's level of coverage will remain unchanged unless during a designated enrollment period the party makes a different election. The amount of coverage chosen by producers in a participating dairy operation requires two selections. One is the margin trigger and the second is the amount of milk covered (which is based on a history of production). Not applicable. Not applicable. Producers approved for DMC benefits must maintain and retain accurate records and accounts that will document that they meet all eligibility requirements for three years after the date of payment to the dairy operation. Destruction of the records three years after the date of payment shall be the risk of the party undertaking the destruction. Statutory Formula: Title 7 CFR Chapter 1430 Subpart C Public Law 115-334

Matching requirements are not applicable to this assistance listing.

MOE requirements are not applicable to this assistance listing. Method of awarding/releasing assistance: For 2019, the DMC enrollment date is June 17, 2019 through September 20, 2019 for 2019 coverage year. For 2020 and future years, participating dairy operations must enroll during the coverage election period which occurs prior to the coverage year. DMC is authorized to spend program benefits until December of 2023, the end of 2018 Farm Bill. None/Not specified. Douglas E. Kilgore
1400 Independence Avenue, SW
Washington, DC 20250-0512 USA
Douglas.E.Kilgore@usda.gov
Phone: 202-720-9011 https://www.fsa.usda.gov/programs-and-services/dairy-margin-coverage-program/index 12-4336-0-3-999 (Direct Payments for Specified Use) FY 22$396,628,000.00; FY 23 est $1,753,569,000.00; FY 24 est $1,304,720,000.00; FY 21$780,786,000.00; FY 20$218,203,000.00; FY 19$319,151,000.00; FY 18$0.00; - Not applicable/available. Regulations published in the Federal Register, 7 CFR Part 1430. CCC is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. Program is announced through news media. Not applicable.