As of July 1, 2015, dairy farmers can enroll in the U.S. Department of Agriculture’s (USDA) Margin Protection Program for coverage in 2016. The voluntary program, established by the 2014 Farm Bill, provides financial assistance to participating dairy operations when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.
Krysta Harden, USDA deputy secretary, made the announcement while visiting Wolfe’s Neck Farm and dairy school in Freeport, Maine.
"More than half of our nation’s dairy producers enrolled in the 2015 program, which exceeded our expectations for the first year of the program," said Harden. "We are confident that dairy farmers across the country will again take advantage of this safety net program for 2016. USDA will continue outreach efforts, including partnering with cooperative extension services, to ensure dairy producers are fully informed about the protections that this safety net program can provide during periods of market downturns.”
The Margin Protection Program gives participating dairy producers the flexibility to select coverage levels best suited for their operation. Enrollment begins July 1 and ends on Sept. 30, 2015, for coverage in 2016. Participating farmers will remain in the program through 2018 and pay a $100 administrative fee each year. More than half of applicants selected higher coverage beyond the basic level in 2015.
Producers also have the option of selecting a different coverage level during open enrollment each year.
Margin Protection Program payments are based on an operation’s historical production. An operation’s historical production will increase by 2.61% in 2016 if the operation participated in 2015, providing a stronger safety net.
USDA also has an online resource available to help dairy producers decide which level of coverage will provide them with the strongest safety net under a variety of conditions. The enhanced Web tool, available at www.fsa.usda.gov/mpptool, allows dairy farmers to quickly and easily combine their 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, mobile phone, or tablet, 24 hours a day, seven days a week.
Dairy operations enrolling in the program must meet conservation compliance provisions. Producers participating in the Livestock Gross Margin insurance program may register for the Margin Protection Program, but this new margin program will only begin once their Livestock dairy insurance coverage has ended. Producers must also submit form CCC-782 for 2016, confirming their Margin Protection Program coverage level selection, to the local Farm Service Agency (FSA) office. If electing higher coverage for 2016, dairy producers can either pay the premium in full at the time of enrollment or pay a minimum of 25 percent of the premium by Feb. 1, 2016.