Grain Prices May Trigger DMC Payments Later This Year

The Dairy Margin Coverage (DMC) payment has been quiet for most of 2026, but rising feed prices and volatile grain markets may bring a change in the rest of the year. According to Katie Burgess, Dairy Market Advising Director with EA Risk, the low milk prices in Q1 led to some payments in January and February, but as milk prices rose, payments essentially stopped from March through July.

The USDA's official DMC forecast shows potential payments from August through December, with some months projected at more than $1 per hundredweight. However, this will depend on the price of corn, soybean meal, and hay through harvest. A recent rally in grain prices, coupled with mostly sideways milk markets, could be changing the DMC payment outlook.

Burgess explains that 'it's really going to depend on the grain price outlook.' The grain markets have been volatile over the past month, with corn prices spiking and soybean meal increasing. Hay prices may also add pressure to the margin.