What's Up at the USDA Office?

Upcoming Deadlines/Dates
April 29: Deadline to sign up for Dairy Margin Coverage (DMC)
May 14: Deadline to complete CRP Management Activities
May 15 - August 1: CRP Primary Nesting Season
May 31: Deadline to apply for a Marketing Assistance Loan (MAL) for 2023 crops

Dairy Margin Coverage Signup Begins
Dairy producers are now able to enroll for 2024 Dairy Margin Coverage (DMC), an important safety net program offered through the U.S. Department of Agriculture (USDA) that provides producers with price support to help offset milk and feed price differences. This year’s DMC signup began on Feb. 28, 2024, and will end on April 29, 2024.

For those who sign up for 2024 DMC coverage, payments may begin as soon as March 4, 2024, for any payments that triggered in January 2024.

DMC is a voluntary risk management program that offers protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer.  In 2023, Dairy Margin Coverage payments triggered in 11 months including two months, June and July, where the margin fell below the catastrophic level of $4.00 per hundredweight, a first for Dairy Margin Coverage or its predecessor Margin Protection Program.
2024 DMC Coverage and Premium Fees
FSA has revised DMC regulations to extend coverage for calendar year 2024, which is retroactive to Jan. 1, 2024, and to provide an adjustment to the production history for dairy operations with less than 5 million pounds of production. For 2024 DMC enrollment, dairy operations that established supplemental production history through Supplemental Dairy Margin Coverage for coverage years 2021 through 2023, will combine the supplemental production history with established production history for one adjusted base production history.

For dairy operations enrolled in 2023 DMC under a multi-year lock-in contract, lock-in eligibility will be extended until Dec. 31, 2024. In addition, dairy operations enrolled in multi-year lock-in contracts are eligible for the discounted DMC premium rate during the 2024 coverage year.

DMC offers different levels of coverage, even an option that is free to producers, minus a $100 administrative fee. The administrative fee is waived for dairy producers who are considered limited resource, beginning, socially disadvantaged or a military veteran. To determine the appropriate level of DMC coverage for a specific dairy operation, producers can use the online dairy decision tool.  

DMC Payments
DMC payments are calculated using updated feed and premium hay costs, making the program more reflective of actual dairy producer expenses. These updated feed calculations use 100% premium alfalfa hay.
More Information
USDA also offers other risk management tools for dairy producers, including the Dairy Revenue Protection (DRP) plan that protects against a decline in milk revenue (yield and price) and the Livestock Gross Margin (LGM) plan, which provides protection against the loss of the market value of milk minus the feed costs. Both DRP and LGM livestock insurance policies are offered through the Risk Management Agency. Producers should contact their local crop insurance agent for more information.

For more information on DMC, visit the DMC webpage or contact the Fayette County USDA service center 563-422-5770 Ext. 2.

Loan Deficiency Payments - Wool, Mohair and Unshorn Pelts
Loan Deficiency Payments (LDPs) provide marketing assistance for producers of many commodities, including graded and non-graded wool, mohair, and unshorn pelts. LDPs are payments made to producers who, although eligible to obtain an MAL, agree to forgo the loan in return for a payment on the eligible commodity.

FSA is now accepting requests for 2024 LDPs for all eligible wool, mohair, and unshorn pelts. These requests should be made on or before the final availability date of Jan. 31, 2025. USDA recently announced 2024 wool and mohair marketing assistance loan rates.

To be eligible for a wool or mohair LDP, producers must produce and shear eligible mohair and wool in the U.S. during the applicable crop year and must:
• comply with conservation and wetland protection requirements.
• report all cropland acreage on applicable farms where the eligible commodity is produced.
• meet Adjusted Gross Income (AGI) limitations.

Unshorn pelts are eligible for LDPs only. In addition to the criteria above, producers of unshorn pelts must have sold the unshorn lamb for immediate slaughter or slaughter the lambs for personal use. In addition to producer eligibility, the commodity must have been produced and shorn from live animals by an eligible producer, be in storable condition, and meet specific CCC minimum grade and quality standards.  

To be considered for a LDP, producers must first have the form CCC-633 EZ, Page 1, on file with FSA prior to losing beneficial interest in the wool, mohair, or unshorn pelt. It is best to visit the county office and submit the CCC-633 Page 1 right before you shear. This is completed one time per crop year and indicates your intention to receive LDP benefits. Contact the Allamakee County FSA office with any questions regarding wool LDP’s 563-568-2148, Ext. 2.

Watch Credit In Years of Tight Margins
With anticipated profit margins looking to be much narrower for the 2024 year, watching expenses closely, capturing market opportunities and being mindful of personal consumer credit are all crucial to the success of your operation. While we can’t adjust the cost of inputs, be mindful of alternatives that could mitigate those costs, yet yield the same result. If you have enough cash on hand to cover the input expense, pay in cash instead of advancing on the line of credit, saving you interest in the long run.

When making capital expenditures, there is no metric to say what is best for each operation but acknowledge when you really don’t need that item or when the cash flow simply can’t cover another installment. On the personal side of finances, higher wages coupled with the increased cost of living has made family living expenses climb to new levels. These are the years to tighten down on unnecessary expenses, making and sticking to a budget, and trying to put a little extra away for a rainy day.

Remember to “pay yourself” each month from wages. Put funds in an account and forget you have them, unless necessary. Remember, if it doesn’t make dollars, it doesn’t make sense.