USDA’s Dairy Margin Coverage triggers a payment for participating farmers when the difference between the all-milk price and the average feed price falls below a certain level. DMC was triggered in 11 of the 12 months in 2023. Associated Milk Producers Incorporated Vice President of Marketing Sarah Schmidt says the risk management program was working as intended. “That said, the calculation for that program uses a national milk price. Because the vast majority of our milk goes to cheese and cheese is the low market price right now, our average milk price in the Midwest is not close to the national average milk price.” said Schmidt. “Our dairy farmers are telling us DMC isn’t providing the support that they had typically come to expect.” DMC payments kick in when margins are at $9.50 per hundredweight or less. Due to increased costs, Schmidt said that margin should increase to $10 per hundredweight. AMPI would like to see changes to the DMC program when the new farm bill is completed. Schmidt remains hopeful that a new farm bill will pass this year, but her optimism is cooling with it being an election year. Listen to the interview.
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