VDACS establishes new Dairy Producers Margin Coverage Premium Assistance Program

The Virginia Department of Agriculture and Consumer Services has established a new reimbursement program to assist dairy producers in the state that participate in the federal Dairy Margin Coverage Program.

The new Dairy Producers Margin Coverage Premium Assistance Program reimburses Virginia dairies for the premium payment they have made for the federal program at the tier 1 level.

“Virginia’s dairy industry produces safe, wholesome products that are enjoyed both locally and around the world. But dairy farms have recently faced a whole host of challenges,” said VDACS Commissioner Brad Copenhaver. “I encourage all dairies in Virginia to participate in the federal Dairy Margin Coverage program, work with your local soil and water conservation district to implement a qualifying conservation practice, and apply to take advantage of this reimbursement funding.”

“Virginia’s dairy farmers have experienced volatile and increasingly depressed milk prices in recent years due to factors outside of their control. Weather events, shifting consumer preferences, trade disruptions and the ongoing pandemic have all had impacted milk prices while at the same time input costs have risen sharply over the past years,” said Eric Paulson, Executive Secretary, Virginia Dairymen’s Association. “This program will assist producers by removing some of the volatility and provide risk management for their farms.”

Applications for the new Dairy Producers Margin Coverage Premium Assistant Program will be available this fall. Eligible dairy producers will receive notification of the application’s availability directly and should submit program applications to VDACS by Feb. 1, 2022.

To become eligible for the new Dairy Producers Margin Coverage Premium Assistant Program, dairies in the state must meet the following criteria:

• Have a resource management plan or nutrient management plan that is certified or undergoing certification by the Virginia Department of Conservation and Recreation or a local soil and water conservation district.
• Participate in the federal Dairy Margin Coverage Program at the tier I level, as contained in the federal Agriculture Improvement Act of 2018.

“This program offers the opportunity for producers to participate in the Dairy Margin Coverage program while having their Tier 1 premium payments returned to them,” said Kyle Shreve, Executive Director, Virginia Agribusiness Council. “Dairy producers simply have to show they have paid their premiums and that they have a nutrient management plan to eliminate the risk of participating in this federal insurance program. Participation would certainly help producers with aid should prices continue to fall and input costs continue to rise and the Council is proud to support the program.”

The Dairy Producer Margin Coverage Premium Assistance Program is a result of Del. Wendy Gooditis’s House Bill No. 1750 and Sen. Mark Obenshain’s Senate Bill No. 1193, which were unanimously approved during the 2021 General Assembly first special session and signed into law by Gov. Ralph Northam. Program funding for the current fiscal year is set at one million dollars. Reimbursement to eligible dairies will be provided on a first-come, first-served basis and is limited to the availability of funds.

“Virginia dairy farmers have faced a multitude of severe economic challenges in recent years due to ongoing changes in domestic demand, sharp declines in exports and the pandemic-fueled disruption of market channels and product demand during the past 16 months. During that time we’ve lost probably 20 percent of state dairy farms,” said Tony Banks, senior assistant director of agriculture, development and innovation for Virginia Farm Bureau Federation. “Virginia’s Premium Assistance Program will allow some dairy farmers, who otherwise couldn’t, to participate in DMC, the federal risk management program. All participating dairy farmers will benefit from the financial support offered by the Commonwealth.”

Virginia’s dairy industry is one of the Commonwealth’s top commodities. According to 2019 USDA data, the state’s dairy industry produced nearly 1.5 billion pounds of milk annually and had cash receipts of $290.1 million.