Cheese Reporter, 12-24-2021

Richmond, VA, and Annapolis, MD—The Virginia Department of Agriculture and Consumer Services (VDACS) can assist the state’s dairy farmers who particulate in the federal Dairy Margin Coverage (DMC) program with a new state reimbursement program, Brad Copenhaver, VDACS commissioner, announced recently.

The new Dairy Producer Margin Coverage Premium Assistance Program reimburses Virginia dairy farmers for the premium payment they make for participation in the DMC program at the Tier 1 level, Copehnaver explained.

“This reimbursement removes some of the volatility for producers while also providing risk management for dairy farms,” Copenhaver said. “To become eligible for the new Dairy Producers Margin Coverage Premium Assistance Program, Virginia dairies must participate in the federal DMC program at the Tier I level and have a resource management plan or nutrient management plan that is certified or undergoing certification by the Virginia Department of Conservation and Recreation or a local soil and water conservation district.

“Virginia’s Dairy Producer Margin Coverage Premium Assistance Program will allow some dairy farmers who otherwise couldn’t afford to participate in the federal DMC program to do so by having their Tier 1 premium payments returned to them,” Copenhaver continued. “Dairy producers simply have to show they have paid their premiums and that they have a nutrient management plan. Participation would certainly be a benefit should prices continue to fall and input costs continue to rise.”

The signup period for the DMC program, which opened on Dec. 13, and runs through Feb. 18, 2022, enables dairy producers to get coverage through this safety-net program for another year as well as get additional assistance through the new Supplemental DMC.

Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production.

The DMC program “provides a crucial safety net for dairy producers when the difference between the all-milk price and the average feed price falls below a certain dollar amount that is selected by the producer,” Copenhaver said.

The Maryland Department of Agriculture (MDA) also recently announced that it will continue its popular cost-share program to cover premiums for dairy farmers participating in the DMC program. The state’s cost-share program will cover premiums for participating Maryland dairy farmers’ Tier I production in 2022 (up to 5 million pounds of milk produced) at the $9.50 margin coverage level.

The state cost-share program gives Maryland dairy producers an opportunity to receive “muchneeded protection” from the DMC program at no cost, said Joe Bartenfelder, MDA secretary. He is encouraging all of the state’s dairy farmers to enroll in the program.

Maryland Gov. Larry Hogan first announced the state costshare program in 2019. Now the program remains popular, with more than 80 percent of Maryland dairy farmers enrolling in the program, according to the MDA.

Authorized under the 2018 farm bill, the Dairy Margin Coverage program is a voluntary program that provides dairy operations with risk management coverage that pays producers when the difference between the national price of milk and the average cost of feed falls below a certain level selected by the program participants.

Under the DMC program, eligible dairy operations must, among other things, select a coverage level ranging from $4.00 to $9.50 per hundredweight in 50-cent increments; and select a coverage percentage of the dairy operation’s production history ranging from 5 percent to 95 percent, in 5-percent increments.

For the 2021 DMC program year, a payment has triggered for October; income over feed cost margin was $8.77 per hundredweight. Payments also triggered in January, February, March, April, May, June, July, August and September.

For the 2020 DMC program year, payments triggered for March, April, May, September and December.

For the 2019 DMC program year, payments triggered in January, February, March, April, May, June and July.

Eligible program participants in DMC are also eligible to participate in the Livestock Gross Margin for Dairy Producers (LGM-Dairy) Program and the Dairy Revenue Protection Program administered by USDA’s Risk Management Agency.