Agriculture Secretary Sonny Perdue extended the deadline for producers to sign up for the Farm Service Agency’s Margin Protection Program – Dairy (MPP) for one week.
The program provides a much-needed safety net for dairy producers, and signup will continue until Friday, June 8, 2018, for them to elect coverage.
All dairy operations must make new coverage elections for 2018, even if the operation was enrolled during the previous 2018 signup period. Coverage elections made for 2018 will be retroactive to Jan. 1, 2018.
“We encourage all farmers who haven’t yet signed up to investigate for themselves and learn whether the MPP program will work for them,” said Ernie Birchmeier, livestock and dairy specialist with Michigan Farm Bureau. “Based on the numbers we’ve seen out there, there appears to be a financial advantage for farmers with lower production levels. There’s no point in leaving money on the table.”
The Margin Protection Program for Dairy (MPP-Dairy) is a voluntary risk management program for dairy producers authorized by the 2014 farm bill through Dec. 31, 2018. Significant changes to MPP-Dairy for the 2018 coverage year are further authorized by the Bipartisan Budget Act of 2018.
The MPP-Dairy offers protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.
Changes to MPP-Dairy
Based on feedback from dairy producers, Congress made several changes to MPP-Dairy in the Bipartisan Budget Act of 2018, including:
- Calculations of the margin period is monthly rather than bi-monthly.
- Covered production is increased to 5 million pounds on the Tier 1 premium schedule, and premium rates for Tier 1 are substantially lowered.
- An exemption from paying an administrative fee for limited resource, beginning, veteran, and disadvantaged producers. Dairy operators enrolled in the previous 2018 enrollment period that qualify for this exemption under the new provisions may request a refund.
USDA is mailing postcards advising dairy producers of the changes. For more information, contact your local USDA service center.
Dairy operations must make a new coverage election for 2018, even if you enrolled during the previous 2018 signup period. Coverage elections made for 2018 will be retroactive to January 1, 2018.
About the program
The program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee (which is waived in some cases); and (2) various levels of buy-up coverage. Read more on our fact sheet.
Tool to explore coverage options
USDA has a web tool to help producers determine the level of coverage under the MPP-Dairy that will provide them with the strongest safety net under a variety of conditions. The online resource allows dairy farmers to quickly and easily combine unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can also review historical data or estimate future coverage based on data projections. The secure site can be accessed via computer, smartphone, tablet or any other platform.
The National Milk Producer’s Federation (NMPF) lauded the extension.
“We believe an extension of the sign-up period beyond the June 1 deadline will be beneficial in recruiting as many farmers as possible into the program,” said Jim Mulhern, president and CEO of NMPF. “In particular, the late spring planting in numerous dairy states, especially in the Midwest, means that many farmers have been in their fields in recent weeks and unable to sit down and make decisions about their risk management options available through USDA.”