Given the promising outlook of milk prices in 2022, there are no forecasted payments in the DMC Decision Tool at this time.  However, the lack of forecasted returns should not eliminate DMC as a baseline risk management option, especially for farms that can cover a significant portion of their milk production in the Tier 1 category.  At the maximum coverage of $9.50/cwt for up to 5Mlbs of milk in Tier 1, a $7,500 expense in DMC coverage could be considered a fairly affordable catastrophic insurance policy given the degree of uncertainty that lingers in the environment considering feed and fertilizer costs, as well as labor cost and availability.

I posted the new changes that USDA announced back in December, including the option to update production history for farms with a production history less than 5M lbs of milk annually and a feed cost formula change. For producers with a production history on record of less than 5Mlbs, they will want to update their 2021 contracts with the new supplemental coverage (which is based on 2019 actual production) before signing up for 2022 coverage. Supplemental coverage will be available 2021-2023. The sign-up period runs through February 18, 2022 at local FSA branch offices.