The USDA announced the signup period of the Dairy Margin Coverage (DMC) program, considered a ‘dairy safety net’ that was authorized by the passage of the 2018 Farm Bill. It is meant to help dairy producers “manage the volatility of milk and feed prices.”
Farmers can begin signing up for coverage under the DMC June 17. It replaces the Margin Protection Program for Dairy (MPP-Dairy), and allows those who participated in MPP-Dairy from 2014-2017 to receive a repayment or credit for premiums paid into the program.
US Secretary of Agriculture Sonny Perdue said, “With an environment of low milk prices, high economic stress, and a new safety net program with higher coverage levels and lower premiums, it is the right time for dairy producers to seriously consider enrolling when signup opens.”
“For many smaller dairies, the choice is probably a no-brainer as the retroactive coverage through January has already assured them that the 2019 payments will exceed the required premiums.”
Dairy-friendly, accurate margins
All dairy operations in the US with qualifying production history are eligible for the program, and producers can choose higher coverage levels for a premium, according to the USDA. If they choose to lock in coverage levels until 2023, producers will receive a 25% discount.
USDA is offering a DMC decision support tool on its website in partnership with the University of Wisconsin. The National Milk Producers Federation (NMPF) called it a ‘dairy-friendly’ initiative and ‘long-awaited.’
Jim Mulhern, president and CEO of the NMPF, said, “The DMC provides a stronger safety net for America’s dairy producers, one sorely needed as low prices, trade disturbances and chaotic weather patterns combine to create hardships.”
“We have advocated for months that margin calculations must consider the higher feed costs dairy producers pay to properly nourish their livestock.”
The FarmFirst Dairy Cooperative also applauded the news, pointing to the program’s calculation that reflects a more accurate hay price for feed applications.
Jeff Lyon, general manager for FarmFirst Dairy Cooperative, said, “This is great news and is something that has been a FarmFirst Dairy Cooperative policy for quite some time. We are happy to see it being implemented into the DMC program. This adjustment to the calculation will more closely align with dairy farmer costs and provide a more accurate margin payment.”
Addressing labor woes
Also last week, the Cellar-Newhouse Amendment passed the House Appropriations Committee to allow dairy employees greater access to the H-2A visa program. It amends the fiscal year 2020 homeland security spending bill.
This will upgrade the H-2A program for year-round workers from the current provisions that only accommodate temporary or seasonal farm jobs. It was introduced by Reps. Henry Cuellar (D-TX) and Dan Newhouse (R-WA).
The American Dairy Coalition (ADC) said it will help alleviate labor problems in dairy, and said, “Without a tool to provide our nation’s dairy farmers with a reliable workforce, farms struggle to grow or sustain their businesses with confidence.”
Laurie Fischer, CEO of ADC, said “Dairy owners are constantly seeing their ‘Help Wanted’ ads go unanswered. Our domestic workforce is not filling agricultural jobs that are necessary to keep it running.”
The NMPF said, “The current H-2A program simply isn’t an option for a commodity that ‘harvests’ its product multiple times a day, every day.”
“Creating an additional legal pathway for workers to connect with farm employers deserves bipartisan support, and the history of this legislation shows such support is readily available. It is critical that the government creates a system that provides secure, legal employment.”