Dairy Margin Coverage Program

Farm Service Agency

Overview

The 2018 Farm Bill authorizes the new Dairy Margin 

Coverage (DMC) program, which replaces the 

Margin Protection Program for Dairy (MPP-Dairy). 

Much like the MPP-Dairy program, the DMC program 

is a voluntary program that provides dairy operations 

with risk management coverage that will pay 

producers when the difference (the margin) between 

the national price of milk and the average cost of feed 

falls below a certain level selected by the program 

participants.

Who is Eligible?

All dairy operations in the United States are eligible 

for the DMC program. An operation can be run either 

by a single producer or multiple producers who 

commercially produce and market cows’ milk. Each 

producer on the operation must share in the risk of 

producing milk and make contributions (including 

land, labor, management, equipment, or capital) to the 

operation of the dairy that are at least equal to the 

individual or entity’s share of the proceeds of the 

operation.

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FACT SHEET

June 2019

An eligible dairy operation must:

• have a production history determined by the USDA

 Farm Service Agency (FSA).

• be registered to participate during a signup

 announced by FSA.

• pay a $100 administrative fee annually for each year

 of participation, except if the dairy operation

 qualifies for a waiver for limited resource, beginning,

 socially disadvantaged, or veteran farmers and

 ranchers.

• select a coverage level ranging from $4.00 to $9.50

 per hundredweight in $0.50 increments.

• select a coverage percentage of the dairy operation’s

 production history ranging from 5 percent to

 95 percent, in 5 percent increments.

If a dairy is operated by more than one producer, it will 

be registered as a single operation. If producers 

operate two or more dairies, each operation will be 

registered separately. 

Eligible program participants in DMC are also eligible 

to participate in the Livestock Gross Margin for Dairy 

Producers Program and the Dairy Revenue Protection 

Program administered by the Risk Management 

Agency.

How it works:

Production History

For most operations, production history is based on the 

highest milk production in 2011, 2012, and 2013. 

Newer dairy operations have other options for 

determining production history. 

The production history determined for a dairy 

operation participating in the DMC 

program may only be adjusted once to 

reflect any increase in the national 

average milk production.
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DAIRY MARGIN COVERAGE PROGRAM - JUNE 2019

USDA is an equal opportunity provider, employer, and lender.

Administrative and Premium Fees and

Premium Fee Discount

The DMC program offers:

• catastrophic coverage at no cost, other than an annual

 $100 administrative fee. 

• greater coverage, at various levels, for a premium in

 addition to a $100 administrative fee.

 The schedule of premiums is provided in the

 following table.

A dairy operation that selects dairy margin coverage 

above the catastrophic level coverage is required to 

pay, in addition to the annual administrative fee, if 

applicable, an annual premium based on the coverage 

level and percentage of production history. A second 

election on production above 5 million pounds in Tier 

II (between $4 and $8) may be chosen if $8.50 or 

above is elected in Tier I.

New dairy operations that first register for the DMC 

program for a calendar year after the start of a calendar 

year can lock-in coverage for the premium discount by 

paying a pro-rated premium. That premium will be 

based on the portion of the calendar year for which the 

dairy purchases the coverage. 

Tier 1

Premium per cwt for 

covered production 

history of 5 mil lbs.

or less

 None

 $0.0025

 $0.005

 $0.030

 $0.050

 $0.070

 $0.080

 $0.090

 $0.100

 $0.105

 $0.110

 $0.150

Coverage 

Level

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

$7.00

$7.50

$8.00

$8.50

$9.00

$9.50

Tier 2

Premium per cwt, all 

years for covered 

production history over 

5 mil lbs.

None

$0.0025

$0.005

$0.100

$0.310

$0.650

$1.107

$1.413

$1.813

N/A

N/A

N/A

A dairy operation that makes a one-time election of 

coverage level and coverage percentage that are 

applicable to each of calendar years 2019 through 

2023 will receive a 25 percent discount on premium 

rates.

For More Information

For more information about FSA programs, visit 

fsa.usda.gov or contact your local FSA office. To find 

your local FSA office, visit farmers.gov.

This fact sheet is for informational purposes only; 

other eligibility requirements or restrictions may apply.