Long-awaited revisions to Dairy Margin Coverage Program expected to greatly benefit dairy farmers
The Midwest Dairy Coalition today praised USDA Secretary Tom Vilsack and Sen. Tammy Baldwin (D-WI), Sen. Amy Klobuchar (D-MN), Sen. Tina Smith (D-MN), Sen. Debbie Stabenow (D-MI), Sen. Patrick Leahy (D-VT), Rep. Angie Craig (D-MN) and former Rep. Collin Peterson (D-MN) for their strong efforts in getting the Supplemental Dairy Margin Coverage (DMC) program across the finish line.
USDA announced in June its plans to provide $580 million for the Supplemental Dairy Margin Coverage program, which targets small and medium farms. Details of the program were expected in the coming weeks.
Today, USDA announced the rules to implement the new Supplemental DMC program, which was established by the Consolidated Appropriations Act of 2021. In doing so, USDA also announced the start of the signup period for the Dairy Margin Coverage (DMC) program as well as beneficial changes to the DMC feed cost formula.
The Supplemental DMC program will provide roughly $580 million to assist small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production in the Dairy Margin Coverage (DMC) program because of outdated DMC production history rules established in 2014. Now, they will be able to retroactively receive partial payments for that supplemental production for 2021, as well as for 2022 and 2023, using their 2019 milk production data, The supplemental DMC payments are limited to production of up to 5 million pounds annually per operation.
“The supplemental program has been long-anticipated and we are grateful not only to Secretary Vilsack and the staff at USDA, but also to the members of Congress who championed this effort and brought it to fruition,” said Steve Etka, spokesperson for the Midwest Dairy Coalition. “Expansion of this safety net program will ensure it can bring much-needed help to dairy farm families.”
Updates to the DMC program have long been supported by the Coalition, which worked to gain support of key members of Congress and worked closely with USDA in moving the measure forward. In addition, Etka says the Coalition supports the changes to the DMC feed cost formula, which will now use 100% premium alfalfa hay costs figures rather than 50%, helping DMC payments to better reflect actual dairy producer expenses.
In addition to announcing the details of the new Supplemental DMC program and changes to the DMC feed cost formula, USDA today announced the start of sign-up for DMC for 2022, which runs from Dec. 13, 2021, to Feb. 18, 2022. Sign-up for the Supplemental DMC will take place during the same time period.
According to USDA’s announcement, Supplemental DMC will require a revision to a producer’s 2021 DMC contract and must occur before enrollment in DMC for the 2022 program year. Producers will be able to revise 2021 DMC contracts and then apply for 2022 DMC by contacting their local USDA Service Center.
Historically, federal dairy policy has penalized regions like the Upper Midwest by establishing policies that discriminate against manufactured dairy products, such as cheese, that are the mainstay of our region's dairy industry.
The Coalition has built a long history of working to end such discrimination, and promote policies that provide benefits to producers without regard to the end use of milk..
The Coalition has been instrumental in the creation of national dairy policies that effectively provide a counter-cyclical safety net for dairy producers in all regions. The Coalition's approach to policy has been extremely helpful to rural economies of dairy-dependent Upper Midwestern states.
The Midwest Dairy Coalition is an alliance of dairy cooperatives representing Upper Midwest dairy producers on federal dairy policy issues.
The Midwest Dairy Coalition earlier called upon USDA Secretary Sonny Perdue to take action in response to the growing impact of the coronavirus pandemic on the nation's dairy farmers and throughout the dairy industry supply chain.
On April 29, USDA Secretary Sonny Perdue replied to the Coalition's request, indicating refusal to re-open the Dairy Margin Coverage program, while outlining steps the department was taking to use direct payments and commodity purchases it believed would provide some certainty to farmers and consumers.
The Midwest Dairy Coalition has joined other producer associations and dairy farmer-owned cooperatives in signing onto a letter of support for the restoration of schools' option to offer low-fat flavored milk with school males, and in other nutrition programs, as proposed by the Food and Nutrition Service in the Federal Register on November 25, 2020.