Sep 18, 2014
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USDA Releases Dairy Margin Protection Plan Details

August 28, 2014
By: Jim Dickrell, Dairy Today Editor
 
 

This morning, Secretary of Agriculture Tom Vilsack released details of the new dairy Margin Protection Plan (MPP) that was created in the 2014 farm bill.

The enrollment period for the program for the remainder of 2014 and all of 2015 runs from September 2 through November 28. USDA has established a cloud-based site that will help dairy farmers understand the program, based on their individual production histories. It can be accessed at www.fsa.usda.gov/mpptool. The web tool requires farms to input their production histories, but with only four more mouse clicks, a farm-specific MPP registration form can be generated. 

All dairy farms can sign-up for the program to receive catastrophic margin protection insurance for a flat fee of $100. The catastrophic protection provides $4/cwt milk price less feed cost margin protection. Additional protection can be purchased for additional premiums, up to an $8 margin. Coverage can be purchased from 25% to 90% of a farm’s production history (the highest milk production of 2011, 2012 or 2013).

Once dairy farmers sign-up for the program, they must pay the $100 fee each year to remain in the program through 2018. However, they will be able to adjust their supplemental coverage each year, with the sign-up running from July 1 through September 30 for the subsequent year. Farms that do not sign up this year will be allowed to sign up in subsequent years. 

The National Milk Producers Federation (NMPF) also issued a release this morning, further explaining the program. For example, there was some ambiguity in the farm bill language regarding dairy farmers who produce more than 4 million pounds of milk annually. USDA has since clarified that all farms will be eligible for the lower premiums on the first 4 million pounds of production. Example, says the NMPF release, "a farm with an annual milk production history of 8 million pounds that elects to cover 50% of its production history would pay the lower rate on all 4 million pounds enrolled in the program."

Farmers have two options for payment of premiums. Option 1 is to pay premiums in full at the time of sign or by February 1. Option 2 is to pay 25% of the premium by February 1 with the balance due June 1.

The Margin Protection Program final rule will be published in the Federal Register August 29. There will be a 60 day public comment period. Written comments must be submitted by October 28, 2014 at www.fsa.usda.gov or www.regulations.gov.

You can read the USDA release here.

Read the NMPC release here.

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RELATED TOPICS: Dairy, USDA, 2014 Farm Bill

 
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