Dairy Security Act Fact Sheet

Background Information

For more than three years, dairy producers and other leaders worked together to develop new domestic dairy policy to provide farm families the support and tools they need to weather market volatility like that experienced in 2009 and part of 2010.The result was a policy framework that would provide greater protection to our members, keep them competitive in the global marketplace and strengthen the industry as a whole.

That proposal was turned into H.R. 3062, the Dairy Security Act (DSA), introduced by Reps. Collin Peterson (D-Minn.) and Mike Simpson (R-Idaho). The main components of the Dairy Security Act have been included in both the current House and Senate versions of the Farm Bill.

The dairy policy changes in the Farm Billeliminatecostly and outdated federal dairy support programs such as the Dairy Product Price Support and Milk Income Loss Contract programs. The bills also:

  • Provide producers the option to participate in a Dairy Producer Margin Protection Program (DPMPP), which would protect producers against the gap between low prices and high feed costs. DPMPP would cover 80 percent of a producer’s base production with an option to purchase supplemental coverage on up to 90 percent of their base production.
  • When the average margin is below $4 for consecutive two-month periods (January-February, March-April, etc.), a producer would receive payment. Supplemental coverage will provide margin protection up to $8.
  • Create a Dairy Market Stabilization Program (DMSP), which would temporarily balance supply and demand inadequacies within dairy markets to improve producer margins. Producers who choose to participate in the federally subsidized DPMPP program will be required to participate in DMSP. The program will send producers a direct economic signal to adjust their milk production when there is a supply and demand imbalance in the market.
DMSP triggers when margins are below $6 and $5 for two consecutive months or are below $4 for one month. Producers are then paid a portion of their production. Visit for more specifics on how the program works.
DMSP is suspended when the market rebalances.

Building a stronger future

The House and Senate versions of dairy policy reform have slight differences. DFA is developing a document that will demonstrate how these programs specifically affect our members in today’s dairy economy. In the meantime, National Milk Producers Federation has provided an in-depth look at howthe current Farm Bill draft’spolicy reform modifications will affect future dairy markets. The document is available at and also is available on myDFA.