The recent Bipartisan Budget Act offers improvements in the dairy Margin Protection Program (MPP), which is designed to help protect dairy producers from market instability and unexpected losses. On Tuesday, Secretary of Agriculture Sonny Perdue encouraged producers to consider enrolling in the new and improved Dairy MPP because it provides dairy producers with better protections from shifting milk and feed prices.
With changes authorized under the Bipartisan Budget Act of 2018, the U.S. Department of Agriculture’s Farm Service Agency (FSA) has set the enrollment period to run from April 9 to June 1, 2018. The program is also retroactive to the beginning of the year.
"We recognize the financial hardships many of our nation’s dairy producers are experiencing right now. Folks are losing their contracts, and they are getting anxious about getting their bills paid while they watch their milk check come in lower and lower each month. The Bipartisan Budget Act provided some much-needed incentives for dairy producers to make cost-effective decisions to strengthen their farms, mitigate risk and conserve their natural resources,” Perdue said. “We encourage dairy producers to review the provisions of the updated program, which Congress shaped with their feedback. Those changes are now in effect, and I’d ask any producers who are interested to contact their local USDA service centers.”
Sen. Debbie Stabenow (D., Mich.) pushed to have the dairy changes made within the budget talks.While the current farm bill created several new risk management tools to protect farmers from unexpected losses, the tool for dairy farmers did not work as intended due to last-minute budget cuts and implementation problems at USDA. Since 2014, dairy farmers have struggled with market uncertainty without a reliable safety net.
“Today’s announcement will allow our dairy farmers to sign up for new and improved coverage that will protect them from losses outside of their control and provide certainty for their businesses and our agricultural economy,” she said.
The program protects dairy producers by paying them when the difference between the national all-milk price and the national average feed cost (the margin) falls below a certain dollar amount elected by the producer.
- Calculations of the margin period are made monthly rather than bimonthly.
- Covered production is increased to 5 million lb. on the Tier 1 premium schedule, and premium rates for Tier 1 are substantially lowered.
- There is an exemption from paying the $100 administrative fee for limited-resource, beginning, veteran and disadvantaged producers. Dairy operators who enrolled during the previous 2018 enrollment period who qualify for this exemption under the new provisions may request a refund.
- Dairy operations must make a new coverage election for 2018, even if enrolled during the previous 2018 signup period. Coverage elections made for 2018 will be retroactive to Jan. 1, 2018. All dairy operations desiring coverage must sign up during the enrollment period and submit an appropriate form (CCC-782), and dairy operations may still opt out by not submitting a form. All outstanding balances for 2017 and prior years must be paid in full before 2018 coverage is approved.
Dairy producers can participate in FSA’s Dairy MPP or the Risk Management Agency’s Livestock Gross Margin Insurance Plan for Dairy Cattle (LGM-Dairy), but not both. During the 2018 enrollment period, only producers with an active LGM-Dairy policy who have targeted marketings insured in 2018 months will be allowed to enroll in the Dairy MPP by June 1, 2018; however, their coverage will start only after active target marketings conclude under LGM-Dairy.
USDA offers a web-based tool to help producers determine the level of coverage under MPP that will provide them with the strongest safety net under a variety of conditions. The online resource, available at www.fsa.usda.gov/mpptool, 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.
USDA is mailing postcards advising dairy producers of the changes. For more information, visit www.fsa.usda.gov/dairy, or contact a local USDA service center.