COLUMBIA, Mo. — Dairy farmers have a tight deadline to protect profits. They have until Sept. 20 to sign up for Dairy Margin Coverage at their local USDA Farm Service Agency office.
The protected profit margin is the difference between national milk prices and national feed costs. University of Missouri dairy economist Joe Horner urged enrollment.
“Dairy Margin Coverage proves popular,” Horner said in an Extension news release, as more than 60% of Missouri producers joined since enrollment started June 17. “Go sign up. You just have to show up and sign up.”
In the 2018 farm bill, Dairy Margin Coverage (DMC) replaced the Margin Protection Program for Dairy. The old plan had gained few participants, but DMC has proved easier and more attractive with 2019 prices, Horner said.
“It’s a no-brainer for most farmers producing less than 5 million pounds of milk,” he said. “DMC helps manage ups and downs of prices.”
So far, milk margins have been tight this year. One appeal of DMC: It’s retroactive to Jan. 1, 2019.
“Payments have already triggered January through July for the $9.50 margin,” Horner said. “Just go enroll for $9.50 margin insurance.”
The plan is flexible. Farmers can protect from 5% to 95% of their production.
DMC does require compliance in some other government programs. Participating dairy farms must protect highly erodible land and wetlands.
The University of Wisconsin developed a computer app to help farmers figure a strong financial safety net. FSA offices have access to that tool.
Across the country, dairy farms have been hard hit financially.
“In times of volatile prices, margin protection is needed,” Horner said.