Click Here for the USDA December 8 Press Release
Highlights:
- Supplemental DMC will provide $580 million to better help small- and mid-sized dairy operations that have increased production over the years but were not able to enroll the additional production. Now, they will be able to retroactively receive payments for that supplemental production.
- Adjustments have been made to the alfalfa portion of the DMC Feed Cost formula. Rather than a 50% weighting for premium alfalfa, the alfalfa price used will be entirely based off of the premium alfalfa price.
- HighGround continues to advise producers to sign up for the $9.50/cwt Coverage Level for Tier 1 Coverage, and between the $4.00/cwt and $5.00/cwt Coverage Levels for Tier 2 Coverage. The DMC Income Over Feed Cost has ranged from $5.25/cwt to $8.77/cwt in 2021 (Jan-Oct reported) triggering a Tier 1 payouts for the $9.50/cwt coverage level every month.
- Since Dairy Margin Coverage (DMC) only covers up to 5 million pounds of production annually HighGround Dairy also recommends that producers actively engage in Dairy Revenue Protection (DRP), Livestock Gross Margin (LGM-Dairy), or other tools to obtain additional coverage. For more questions on these products please contact us!
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Email: drp@highgrounddairy.com
Disclaimer: HighGround Insurance Group (HGIG) is an agency affiliated with HighGround Dairy (HGD). HGIG is a licenesed insurance agency in many US states. HighGround Dairy is a division of HighGround Trading (HGT), an Introducing Broker (IB) registered under United States Laws. Nothing contained herein shall be construed as a recommendation to buy or sell commodity futures or options on futures. This communication is intended for the sole use of the intended recipient. Futures and options trading involves substantial risk and is not suitable for all investors.