IARN — American Farm Bureau officials say applications for the Dairy Margin Coverage program are open.
Dairy farmers in Iowa and around the country can now sign up for the 2022 Dairy Margin Coverage program. Farm Bureau associate economist Danny Munch says the program provides risk protection to dairy farmers when milk prices are low and feed costs are high.
“It’s a voluntary program and administered through FSA, and really pays out payments to farmers given particular coverage levels that they choose. So, going into 2022, we have the Supplemental Dairy Margin Coverage, which is new, and that will actually allow farmers to update their production history from what was the highest marketing’s between 2011 and 2013, to 75 percent the difference between 2011, 2013 and 2019.”
Munch says the Farm Service Agency also adjusted the underlying calculation for alfalfa, used in the average feed cost calculation.
“It used to be 50 percent premium alfalfa, and now they’re accounting for 100 percent premium alfalfa to be more reflective of dairy expenses, and that adjustment will really allow farmers to take advantage of higher payment levels if the change in alfalfa price links to a higher coverage level that they chose.”
Munch adds the most recent margin reported by USDA for October was $8.77 per hundredweight.
“This is actually the largest margin since November of 2020. So, a little bit of an improvement in the dairy markets, partially because of a modest decline in corn and soybean meal prices, but also because a little bit of a restriction in supply in the milk markets. Dairy Margin Coverage really helps protect farmers against massive changes in feed costs, which with all that supply disruptions going on right now, it’s a really good option for dairy farmers to protect themselves moving forward.”
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Story courtesy of the Iowa Agribusiness Radio Network.
Photo by American Farm Bureau Federation
