Dairy Margin Coverage concerns lead to legislation with improvements

At her 2023 Farm Summit, U.S. Rep. Abigail Spanberger heard concerns about the Dairy Margin Coverage (DMC) program directly from Virginia dairy producers.

DMC, a federal insurance program, protects dairy farmers during volatile times particularly when the cost of feed is high, but when revenue also falls due to low milk prices. DMC has received positive feedback since its creation with the 2018 Farm Bill, but improvements are necessary to focus on assisting small and medium-sized dairy farms. The level of production that farmers can cover under the program is still based on data from before 2014, the outdated information poses a serious risk for local farms that have grown since then and now outproduce what their DMC plan covers. Sometimes millions of pounds of milk are left uninsured by the gap and farmers are left vulnerable to devastating financial losses.

Spanberger led the introduction of the Dairy Farm Resiliency Act, which would strengthen the safety net for Virginia dairy farmers during times of high input costs and low consumer prices. The legislation would also require an update to the DMC production level every five years to ensure dairy farmers are adequately insured for their milk production. Medium-sized dairy producers will also be allowed insurance through the legislation.

“Input costs have skyrocketed over the last decade, but the Dairy Margin Coverage program hasn’t kept up with these changes. Virginia’s dairy producers — many of whom have smaller herds — have raised these concerns directly to me,” Spanberger said. “That’s why I’m glad to lead bipartisan legislation to fix this very solvable issue and eliminate some headaches for our dairy farmers. When production costs go up while prices go down, producers of all sizes need the security of a strong farm safety net.”

The Virginia Farm Bureau and Virginia State Dairymen’s Association endorse the legislation.

“Dairy farmers in Virginia, and across the country, continue to face market challenges, high input costs, and elevated levels of risk beyond their control. The DMC program provides a crucial safety net for dairy farmers, and the Dairy Farm Resiliency Act will ensure this program not only keeps pace with a changing industry, but also ensures dairy farmers who otherwise couldn’t afford to participate in the federal DMC program now have access to Tier 1 margin coverage. We thank Rep. Spanberger for her leadership on this bill,” Virginia Farm Bureau President Wayne F. Pryor said.

Spanberger, the only Virginian on the U.S House Agriculture Committee, was made aware of issues with the DMC at her 2023 Farm Bill Summit held in Caroline County. She introduced the legislation with Reps. Marc Molinaro of New York, Elissa Slotkin of Michigan and Derrick Van Orden of Wisconsin.

“The Dairy Margin Coverage program has been pivotal for Virginia’s dairy farm families. The increased economic volatility over the past few years has highlighted the need for effective risk management programs. This bipartisan bill will modernize the DMC program to provide increased resiliency for dairy farmers nationwide. We thank Rep. Spanberger for her commitment to this vital program and for empowering our farmers to thrive amidst times of economic uncertainty,” Eric Paulson, Executive Secretary of the Virginia State Dairymen’s Association, said.