USDA Opens 2022 Signup for Dairy Margin Coverage Program

The USDA opened the signup period for the Dairy Margin Coverage (DMC) Program for the 2022 calendar year. Enrollment for the DMC program ends on February 18, 2022.

Virginia’s dairy industry, one of the Commonwealth’s top commodities, produces safe, wholesome products that are enjoyed locally and around the world. According to 2020 USDA data, the state’s dairy industry produced nearly 1.5 billion pounds of milk with cash receipts of $297.6 million. While this is certainly impressive, Virginia dairy farmers have experienced a host of challenges, such as volatile and increasingly depressed milk prices in recent years due to factors outside of their control. Weather events, shifting consumer preferences, trade disruptions and the ongoing pandemic have all impacted milk prices while input costs have risen sharply over the past few years.

“The USDA’s 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. This year’s DMC program has been expanded to include Supplemental DMC, which provides additional protection for small and mid-sized dairy operations. I encourage all dairies in Virginia to participate in the federal DMC program and to take advantage of the Supplemental DMC program if it is applicable to their operation,” said Brad Copenhaver, Commissioner of the Virginia Department of Agriculture and Consumer Services (VDACS). “In addition, I am extremely pleased that VDACS can assist the state’s dairy farmers with a new state reimbursement program. The new Dairy Producer Margin Coverage Premium Assistance Program reimburses Virginia dairies for the premium payment they make for participation in the federal DMC program at the tier 1 level.”

This reimbursement removes some of the volatility for producers while also providing risk management for dairy farms. 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. 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 Dairy Producer Margin Coverage Premium Assistance Program is a result of Delegate Wendy Gooditis’s House Bill No. 1750 and Senator Mark Obenshain’s Senate Bill No. 1193, which were unanimously approved during the 2021 General Assembly first special session and signed into law by Governor Ralph Northam. Program funding for the current fiscal year is set at one million dollars. Reimbursement to eligible dairies will be provided on a first-come, first-served basis and is limited to the availability of funds. The application period for the Dairy Producer Margin Coverage Premium Assistance Program is currently underway and is scheduled to end on February 1, 2022. Click here for the application.

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