Sign-up period open for Dairy Margin Coverage program

YORK, Pa. — The deadline for producers to sign up for the Dairy Margin Coverage program is Feb. 26.

“The Dairy Margin Coverage program was authorized under the ‘One Big Beautiful Bill’ for calendar years 2026 to 2031,” said Doug Kilgore, program manager for dairy and special programs at the U.S. Department of Agriculture’s Farm Service Agency.

“Probably the most important change is dairy operations will establish a new production history in 2026,” said Kilgore during a webinar hosted by the American Dairy Coalition. “Over the years, that has been one of the complaints about DMC, producers wanted a more current production history.”

To establish a production history, the first step for the FSA county office is to determine if the dairy operation is existing or new.

An existing dairy operation started commercially marketing milk on or before Jan. 1, 2023, and a new dairy operation started commercially marketing milk after Jan. 1, 2023.

“To establish a production history, dairy operations are going to need to provide production evidence and most likely that is going to be statements of milk marketings from the milk marketing organization,” Kilgore said. “They can be monthly check stubs, monthly statements or other payment records or receipts from commercially marketed milk.”

For existing dairy operations, the production history is determined from the higher of milk marketings for the years of 2021, 2022 or 2023.

“Production history for new dairy operations will be determined from the first year marketings, even if it’s a partial year from one of two methods,” Kilgore said.

“The first method is the volume of actual marketings for the months the dairy operation has been in operation, extrapolated to a yearly amount,” the program manager said.

“The second method is an estimate of the actual milk marketings of the participating dairy operation relative to the rolling herd average for the year they started producing and commercially marketing milk,” he said.

During the 2026 sign-up period, dairymen have the option to register for DMC annually or to make a one-time election to lock in coverage levels for six years.

“Dairy operations that lock in a contract will have the same coverage elections for all six years and the benefit is a 25% discount of the DMC premiums,” Kilgore said. “This lock-in election is only available during the 2026 DMC enrollment.”

There is one exception to the lock-in option.

“If a new dairy operation starts up milk production after the coverage election period ends, that dairy operation has the option to establish a production history, create a DMC contract and have that contract eligible for a lock in,” Kilgore said.

Dairy operations that lock in a contract are still required to pay the annual administration fee and the premium fees annually, as well as certify they are commercially marketing milk every year.

Tier 1 pounds of covered milk production has increased from 5 million to 6 million pounds, and the second tier is for over 6 million pounds of milk production.

Dairymen can choose a coverage percentage from 5% to 95%. Coverage levels range from $4 to $9.50 per hundredweight of milk at 50-cent increments for Tier 1 and from $4 to $8 per hundredweight of milk at 50-cent increments for Tier 2.

Premium fees are due by September of the coverage year.

“If they are not paid by Sept. 1, FSA will collect those premiums by whatever means we can,” Kilgore said.

“We have a significant number of dairy operations that have 2025 unpaid premium fees,” the program manager said. “A 2026 contract will not be approved for dairy operations that have unpaid 2025 premiums.

“The DMC is a successful risk management program that protects dairy operations from declines in milk prices and increases in feed costs,” he said.

For more information about the Dairy Margin Coverage program, go to www.fsa.usda.gov.