Dairy Margin Coverage enrollment opens for 2027
Dairy producers have an opportunity to strengthen their risk management plans as enrollment for the 2027 Dairy Margin Coverage program continues through Dec. 18.
Administered by the U.S. Department of Agriculture’s Farm Service Agency, DMC provides financial protection when the difference between the national all-milk price and average feed costs falls below a producer-selected coverage level. Producers may elect coverage levels from $4 to $9.50 per hundredweight, with the highest coverage level offering the greatest protection against tightening margins.
Current market projections suggest DMC may provide value in 2027. Milk prices are forecast to remain in the low $20s per hundredweight, while feed costs are expected to approach $12 per hundredweight. Average DMC margins are projected at approximately $9.34 per hundredweight, below the maximum $9.50 coverage level for much of the year.
The lowest margin is projected for July 2027 at approximately $8.57 per hundredweight, creating the potential for indemnity payments, particularly on Tier 1 production. Producers should carefully evaluate coverage options and consider how DMC fits into their overall risk management strategy.
Recent improvements to DMC have increased program benefits by expanding Tier 1 eligibility from 5 million to 6 million pounds, updating production histories to better reflect current operations and allowing producers to lock in coverage through 2031 at a 25% premium discount through the multiyear election option.
Producers who previously elected multiyear coverage must still certify milk marketing, sign an annual contract and pay the $100 administrative fee to maintain coverage.
Dairy producers are encouraged to contact their local USDA Farm Service Agency office to review coverage options and complete enrollment before the Dec. 18 deadline.
Fred Hall is a dairy field specialist with Iowa State University.
