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Deadline Approaches to Register for Key Dairy Safety Net Program

Posted by Danielle Cooke, Farm Service Agency in Farming
May 14, 2018
Holstein dairy cows eating a prescribed feed
Holstein dairy cows eat a prescribed feed. USDA photo by Scott Bauer.

Dairy producers have until June 1, 2018, to register for the new and improved Margin Protection Program for Dairy (MPP-Dairy), which provides protection to dairy producers from shifting milk and feed prices.

To help raise awareness of recent changes to the program, USDA’s Farm Service Agency (FSA) is holding informational meetings all across dairy country, explaining changes to the program (PDF, 366 KB), coverage levels, premiums and the availability of the Margin Protection Program-Dairy Decision Tool.

In February, Congress made several changes based on feedback from dairy producers to the MPP-Dairy program, including:

  • Calculation of the margin period now 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.

The margin is made up of two parts, the all-milk price and feed costs. This past March, the income over feed cost margin was $6.77 per hundredweight (cwt). That triggered MPP-Dairy payments at the $8, $7.50 and $7 per cwt coverage levels under the terms of the Bipartisan Budget Act. The March all-milk price increased 30 cents per cwt from February to $15.60 while the cost to produce 100 pounds of milk was $8.42, which was 43 cents higher than in February.

The program offers dairy producers catastrophic coverage at no cost to the producer other than an annual $100 administrative fee (which is waived in some cases) as well as various levels of buy-up coverage.

If you own dairy cattle and operate a dairy, you must register in order to participate. 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. All dairy operations must sign up during the enrollment period and submit form CCC-782 (PDF, 3.49 MB) to enroll. Dairy operations may "opt out" by not submitting a form. The final day to act is June 1, 2018.

MPP-Dairy is just one of many USDA programs available to help dairy producers. USDA offers a variety of risk management, disaster assistance and conservation programs to help America’s dairy farmers weather ups and downs in the market and natural disasters as well as invest in improvements to their operations. To learn more, please visit the “Own a Dairy? Get Help from USDA” blog.

USDA sent postcards to eligible dairy producers advising of changes. If you have questions or want to enroll, contact your local USDA service center.

A state-of-the-art milking operation in Arlington, Wis.
A state-of-the-art milking operation in Arlington, Wis. (Photo courtesy of the University of Wisconsin, photo by Sevie Kenyon. Used with permission)
Category/Topic: Farming