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RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Transition Period for LGM-Dairy to DMM is Announced by FSA

Jun 26, 2014

The 2014 farm bill now provides for a new Dairy Margin Management (DMM) program. Dairy farmers have been able to take advantage of Livestock Gross Margin-Dairy (LGM-Dairy) under current crop insurance provisions. However, the 2014 bill provides that a dairy farmer cannot take advantage of both programs to prevent "double-dipping". In addition, the LGM-Dairy insurance program can extend into 2015 after the DMM is scheduled to start in September, 2014. This presented concerns regarding dairy farmers wanting to sign-up for DMM but being prevented since they were already enrolled in LGM-Dairy.

To address these concerns, the FSA just released Notice LD-637 providing a transition period for these farmers. Essentially, the transition allows the dairy farmer to sign up for DMM, but not start the program until their contract under LGM-Dairy expires. Since the DMM payments cover a two-month period at a time, there is a chance a dairy farmer would have no coverage for a full month.

For example, if a dairy farmer has a LGM-Diary contract through February 28, 2015, their DMM coverage would start March 1, 1015. However, if their LGM-Diary contract expired March 31, 2015, their DMM coverage would not start until May 1, 2015.

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