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USDA Announces Rule for Transitioning from LGM-Dairy to the Margin Protection Program

June 26, 2014
By: Catherine Merlo, Dairy Today Western and Online Editor google + 
 
 

If you have an LGM policy with coverage into 2015, you will be allowed to transition in an orderly fashion to MPP.

USDA’s Farm Service Agency announced today one of the rules regarding the transition from the Livestock Gross Margin for Dairy (LGM-Dairy) program to the government’s Margin Protection Program (MPP).

As previously announced, dairy producers will not be allowed to use both MPP and LGM-Dairy insurance, says Ron Mortensen with Dairy Gross Margin, LLC. If a dairy producer has an LGM policy with coverage into 2015, he or she will be allowed to transition in an orderly fashion to MPP.

Dairy producers will be allowed to sign up for the MPP program but not start the coverage until the LGM overage has ended, Mortensen says.

He gives these examples of the LGM-Dairy to MPP-Dairy transition:

• A producer purchases LGM-Dairy in May 2014 with target marketings through April 2015. Coverage under LGM-Dairy will conclude at the end of April 2015, and coverage under MPP-Dairy may begin in May 2015.

• A producer purchases LGM-Dairy in June 2014 with target marketings through May 2015. Coverage under LGM-Dairy will conclude at the end of May; however, coverage under MPP-Dairy may not begin until July 2015, which would result in a gap in coverage. "Remember, MPP has protection in two-month increments," Mortensen says.

Read USDA's official announcement.

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RELATED TOPICS: Dairy, Marketing, USDA, Risk Management

 
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