How Well Is DMC Reflecting Today’s Dairy Market?

Dairy producers are raising questions about how well the Dairy Margin Coverage program is reflecting current conditions.  Undersecretary for Farm Production and Conservation Richard Fordyce said farmers repeatedly tell him they're concerned the program.

"One of the things that continued to kind of bubble up from dairy farmers was the dairy margin coverage program," Fordyce noted.  "And they're a little perplexed why the dairy margin coverage program is not triggering a bit more often or maybe more significantly. You know, that's the margin between feed and milk prices.”

As a result, he said, USDA is taking a closer look at how the program's calculations are working.

"Number one, try to understand, right, why is it not triggering?" said Fordyce.  "Are we using the right numbers, for example, maybe on that feed component side? But we're going to dig into that."

Fordyce said those producer conversations are exactly why USDA spends time meeting with farmers in person.

"We wouldn't have known that that was an issue if we weren't out talking to folks, because, as you know, it did trigger, I think it was January, February, you know, and it was fairly significant payments," Fordyce said.  "Well, it paid enough to pay the premium for the year. And so, yeah, we’re going to take a look at that.”

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