ALBANY COUNTY — The enrollment period has begun for the United States Department of Agriculture’s Dairy Margin Coverage 2022 program, which is designed to insure dairy farmers with established production histories against thinning profit margins by issuing payments whenever the ratio between cost of feed and all milk prices hits a certain threshold.

Those interested should contact their local USDA service center. The enrollment period ends on Feb. 18.

Farmers can enroll at the basic coverage level, which is free except for an annual $100 administrative fee, according to the USDA website. Coverage grants farmers federal money when the national dairy production margin falls under $4.

For a premium per hundredweight that varies based on the scale of the operation, farmers can bolster their coverage to provide relief up to a $9.50 production margin, with coverage levels increasing by 50 cents up to that limit. 

Payments received by the farmer are equal to the difference between their coverage limit and the margin, which is determined monthly. So, according to the National Milk Producers Federation, farmers who had maximum coverage received a payment of $0.77 per hundredweight in October, based on that month’s production margin of $8.73. 

For the 2022 iteration of the program, the government is changing its feed price calculations so that they derive from the price of 100-percent premium alfalfa hay instead of 50-percent premium, which the USDA says will better represent true costs to farmers. The USDA says that, this year, “​​DMC payments have triggered for January through October for more than $1.0 billion.”

Although The Enterprise was not able to procure local participation figures, the USDA states that 75 percent of dairy farmers in the United States are enrolled in the program, and that New York State participation is just below the national average at 74 percent, or about 2,000 of the state’s roughly 2,700 dairy farms that have an established production history. This year, New York dairy farmers have received just under $103 million.

According to the American Farm Bureau Federation, enrollment accelerated after the advent of the COVID-19 pandemic, which had rocked the industry, though local farmers that The Enterprise spoke with last year were not badly affected.

While this particular program was authorized by the 2018 Farm Bill, it has existed in various forms with varying details since at least 2002, with the implementation of the Milk Income Loss Contract program, one of several agriculturally-targeted federal subsidy programs. 

In 2018, The Enterprise covered the sale of a Knox farmer’s dairy cows after falling milk prices made it hard to earn a profit, which that farmer, Paul Keppler, blamed on the surplus generated by factory farms. 

At the time, a spokesman for the Farm Bureau said that the organization was lobbying for changes to what was then known as the Dairy Margin Protection program. After the program was updated to its current form, the Farm Bureau noted that the increased margin limits and other factors raised payments to farmers per hundredweight by more than 80 cents on average, calling the DMC “an attractive risk-management tool.”