Enrollment in Dairy Margin Coverage surged 27% for next year as farmers applied a key lesson of the pandemic.
More than 17,000 farms will be protected in 2021 through USDAâs main dairy risk management program.
Thatâs 68% of the operations with production history on file with the government, according to Mondayâs numbers from the Farm Service Agency.
âI still donât think thereâs enough farmers taking advantage of the program, but itâs a significant increase over last year, and Iâm pleased with that,â said Zach Myers, risk education manager at the Center for Dairy Excellence.
The leap in enrollment comes after many farmers, not expecting a payment, dropped coverage for 2020. Myers believes farmers were trying to rebuild their finances after a string of bad years.
John Newton
The price of Class III milk (milk used to produce cheese) rose to near-record highs in 2020 on the back of increased cheese demand, tighter cheese supplies and USDA’s Farmers to Families Food Box Program. Meanwhile, the price of Class IV milk (milk used to produce butter and dry milk powders) remained at multi-year lows due to COVID-19-related market disruptions and price volatility.
As a result, the difference between the Class III milk price and other prices of milk rose to record-highs. In June, 2020, the Class III milk price was more than $9.60 per hundredweight higher than the base Class I milk price. Similarly, in July, the price difference between Class III and IV rose to nearly $11 per hundredweight.