Three Things You Need to Know About MPP in 2016

Three Things You Need to Know About MPP in 2016

You probably recall the United States Department of Agriculture’s Margin Protection Program (MPP) which was born out of the 2014 Farm Bill. Dairy producers across the country have taken advantage of this risk management tool and you can too. Enrollment is now open for MPP, but according to Marin Bozic, Assistant Professor in Dairy Foods Marketing Economics in the Department of Applied Economics at the University of Minnesota, there are some changes to the program producers need to know about.

  1. Enrollment closes September 30th

In previous years the enrollment period for the program hasn’t closed until the end of December. While the enrollment dates have changed, producers are still required to remain in the program until the 2014 Farm Bill expires according to National Milk Producers Federation (NMPF). Enrolled producers can adjust coverage each year based on their current needs.

  1. Farmers already enrolled in the program will see an increase in production of 2.61%

New dairies that enroll in the program will still be awarded their highest milk production in 2012, 2013 or 2014. The 2.61% increase for currently enrolled farms reflects what USDA determined to be the nationwide increase in milk production per cow according to Bozic. He says it’s also important to note that any production growth above 2.61% cannot be insured through MPP.  

  1. Producers who are enrolled in the Risk Management Agency’s Livestock Gross Margin for Dairy program (LGM) are not eligible to enroll in MPP

According to Bozic, in the past many producers utilized both programs but doing so is no longer allowed. “Even if you have 100 lbs. under LGM for January, you’re not eligible for MPP in 2016,” he says.

Determining which program will have the best coverage for your farm can be tough. Bozic says that a new tool is being developed to make it easier for producers to determine if MPP is the right risk management tool for them. Look for more on that in the September Issue of Dairy Today magazine.

The Margin Protection Program was designed to protect farm equity against low milk prices and damaging profit margins by providing dairy farmers with payments when their margins are below the margin coverage levels they choose each year. Want to learn more about MPP in 2016? Here’s a guide from NMPF.

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