Dairy Margin Coverage Program Signup Numbers Low Despite Benefits

The signup deadline for the Dairy Margin Coverage Program is this Friday, and according to the latest figures from the American Farm Bureau the number of dairy operations signed up is lower than expected. So far, 7,846 operations have enrolled in the program, covering about 64 billion pounds of milk. However, that figure is 23,000 fewer than those that signed up in 2019, and only account for just under one-third of the current total number of U.S. operations and the total volume of milk. Approximately 68% of the country’s licensed operations with established production histories have not signed up for the program.

The drop in 2020’s dairy enrollments was due in part to somewhat positive expectations for the dairy industry going into 2020. The low level of signups just days before the deadline is surprising to many in the industry, given the benefits of enrolling for 2021. A rally in commodity prices may be helpful to many farmers, but it does make feed costs higher for dairy producers. The rising price of feed will squeeze the margins of dairy farmers, and that should make programs like the DMC more attractive to producers.

Coverage is available from as low as $4 cwt to as much as $9.50 cwt.

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