May margin triggers Dairy Margin Coverage Program payment

09-Jul-2020 - Last updated on 09-Jul-2020 at 09:25 GMT

The FSA has issued more than $176m in program benefits to dairy producers who purchased DMC coverage for 2020. Pic: Getty Images/Andrei Stanescu

The U.S. Department of Agriculture’s Farm Service Agency (FSA) says the May 2020 income over feed cost margin was $5.37 per hundredweight (cwt.), triggering the third payment of 2020 for dairy producers who purchased the appropriate level of coverage under the Dairy Margin Coverage (DMC) program.

“This payment comes at a critical time for many dairy producers,” said FSA administrator Richard Fordyce.

“DMC has proved to be a worthwhile risk management tool, providing dairy producers with much- needed financial support when markets are most volatile.”

To date, the FSA has issued more than $176m in program benefits to dairy producers who purchased DMC coverage for 2020.

Authorized by the 2018 Farm Bill, DMC is a voluntary risk management program offering protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer. More than 13,000 operations enrolled in the program for the 2020 calendar year.

Although DMC enrollment for 2020 coverage has closed, signup for 2021 coverage will begin October 13 and will run through December 11, 2020.