Dairy Margin Coverage (DMC) is a Farm Bill safety net program and a widely used risk management tool for dairy farmers. Sign-up at your local FSA office opened on January 12 and will close on February 26, for 2026.
Farmers can cover 5% to 95% of their milk production history from a $4.00 to $9.50 margin, at $0.50 increments. The margin is the difference between the all milk price and feed cost calculated by a predetermined USDA formula that is the same nationwide and is not determined by your dairy farm’s margin.
Dairy farmers’ production levels for DMC are the highest of the farm’s milk production for the years 2021, 2022, or 2023.
There are two tiers of DMC: Tier 1 covers up to 6 million pounds of annual milk production, and Tier 2 covers more than 6 million pounds. This change takes effect in 2026. Tier 1 previously capped production at up to 5 million pounds.
Farmers can sign up for 6 years of coverage, from 2026 through 2031, and receive a 25% discount on premiums.
The Minnesota Department of Agriculture has a Dairy Assistance, Investment, and Relief Initiative (DAIRI). To qualify, you must be a Minnesota dairy farmer who produced less than 16 million pounds of milk in 2022 (~650- to 800-cow dairy) and signed up for the six-year commitment of DMC coverage.
The Minnesota Department of Agriculture has $3 million that will be prorated to the number of farms and pounds of milk that apply.
The following table shows coverage levels and prices per hundredweight (cwt). The discount applies only to the 6-year sign-up.
| Coverage Level | Tier 1 Price per .cwt | Tier 1 Price per .cwt w. Discount | Tier 2 Price per .cwt | Total Premium @ 1 Million Pounds | Total Premium @ 1 Million pounds w Discount |
|---|---|---|---|---|---|
| $9.50 | $0.15 | $0.11 | $ - | $1,425.00 | $1,068.75 |
| $9.00 | $0.11 | $0.08 | $ - | $145.00 | $108.75 |
| $8.50 | $0.11 | $0.08 | $ - | $997.50 | $748.13 |
| $8.00 | $0.10 | $0.08 | $1.81 | $950.00 | $712.50 |
| $7.50 | $0.09 | $0.07 | $1.41 | $855.00 | $641.25 |
| $7.00 | $0.08 | $0.06 | $1.11 | $760.00 | $570.00 |
| $6.50 | $0.07 | $0.05 | $0.65 | $665.00 | $498.75 |
| $6.00 | $0.05 | $0.04 | $0.31 | $475.00 | $356.25 |
| $5.50 | $0.03 | $0.02 | $0.10 | $285.00 | $213.75 |
| $5.00 | $0.01 | $0.00 | $0.01 | $47.50 | $35.63 |
| $4.50 | $0.00 | $0.00 | $0.00 | $23.75 | $17.81 |
| $4.00 | $ - | $ - | $ - | $ - | $ - |
With feed costs lower in 2025, DMC did not pay out in any month. The following table shows the feed input prices and the milk price for each month. Indemnities will be paid only if the Milk Margin Above Feed Cost is below $9.50. The December data has not published yet.
| Month | Corn ($/bu) | Premium Alfalfa Hay ($/ton) | Soybean Meal ($/ton) | All Milk ($/cwt) | Final Feed Costs for DMC($/cwt) | Milk Margin Above Feed Costs for DMC($/cwt) | Indemnity @ $9.50 |
|---|---|---|---|---|---|---|---|
| January | $4.29 | $242.00 | $316.97 | $24.10 | $10.25 | $13.85 | $ - |
| February | $4.58 | $243.00 | $304.78 | $23.60 | $10.48 | $13.12 | $ - |
| March | $4.57 | $242.00 | $303.80 | $22.00 | $10.45 | $11.55 | $ - |
| April | $4.62 | $252.00 | $295.03 | $21.00 | $10.58 | $10.42 | $ - |
| May | $4.64 | $277.00 | $288.75 | $21.30 | $10.90 | $10.40 | $ - |
| June | $4.47 | $244.00 | $280.70 | $21.30 | $10.20 | $11.10 | $ - |
| July | $4.29 | $245.00 | $259.10 | $20.80 | $9.86 | $10.94 | $ - |
| August | $3.96 | $222.00 | $284.36 | $20.90 | $9.38 | $11.52 | $ - |
| September | $4.00 | $221.00 | $301.05 | $20.40 | $9.53 | $10.87 | $ - |
| October | $3.93 | $223.00 | $300.68 | $20.00 | $9.48 | $10.52 | $ - |
| November | $3.98 | $216.00 | $330.87 | $19.70 | $9.66 | $10.04 | $ - |
According to the DMC Bozic website, payments are expected in 2026, particularly in the first half. The following table shows the expected payments at 1 million pounds of production.
| Month | Actual / Forecasted Margin | Tier 1 Covered Production History (lbs) | Tier 2 Covered Production History (lbs) | Tier 1 Forecasted Payment Per Cwt | Tier 2 Forecasted Payment Per Cwt | Total Payment |
|---|---|---|---|---|---|---|
| Jan | $7.34 | 79,166.67 | 0 | $2.16 | $0.66 | $1,709.00 |
| Feb | $7.15 | 79,166.67 | 0 | $2.35 | $0.85 | $1,861.00 |
| Mar | $7.47 | 79,166.67 | 0 | $2.03 | $0.53 | $1,606.00 |
| Apr | $7.63 | 79,166.67 | 0 | $1.87 | $0.37 | $1,481.00 |
| May | $7.90 | 79,166.67 | 0 | $1.60 | $0.10 | $1,267.00 |
| Jun | $7.97 | 79,166.67 | 0 | $1.53 | $0.03 | $1,212.00 |
| Jul | $8.13 | 79,166.67 | 0 | $1.37 | $ - | $1,086.00 |
| Aug | $8.53 | 79,166.67 | 0 | $0.97 | $ - | $768.00 |
| Sep | $9.09 | 79,166.67 | 0 | $0.41 | $ - | $328.00 |
| Oct | $9.47 | 79,166.67 | 0 | $0.03 | $ - | $21.00 |
| Nov | $9.83 | 79,166.67 | 0 | $ - | $ - | $ - |
| Dec | $9.71 | 79,166.67 | 0 | $ - | $ - | $ - |
| 2026 | $8.35 | 950,000 | 0 | $1.19 | $0.21 | $11,339.00 |