Will Dairy Margin Program Extension Boost Enrollment?

September 22, 2015 03:00 PM
 
Dairy Cows

Thanks to slow enrollment, dairy farmers now have nearly two additional months to decide whether they want to sign up for USDA’s Dairy Margin Protection Program. 

“We understand and appreciate how difficult…this time of year is with harvest and so forth,” said Secretary of Agriculture Tom Vilsack on AgriTalk on Tuesday, explaining the decision to move the deadline from Sept. 30 to Nov. 20. “We want to give people plenty of time to evaluate the market. … We’re going to try to make it easier by providing an online tool. We want to give an opportunity for folks to do some calculations, figure out what’s best for their operation and give them a little additional time to make that premium payment as well.”

The news of the extension did not surprise Dairy Today Editor Jim Dickrell, who has followed the implementation of the new program.

“There was a lot of disgruntlement with the program because milk prices had fallen 25% and yet the margins didn’t really trigger any indemnities, because feed prices had gone down,” he said, also on AgriTalk. “I think there was a misunderstanding among producers that if milk prices fell, they would get payments, and that’s not what happened, because of lower feed prices.”

Listen to the full comments of Dickrell and Vilsack on AgriTalk, beginning at the 6-minute mark for Dickrell and the 27-minute mark for Vilsack:

That disillusionment has affected enrollment, according to Dickrell, who said many producers either have either been unwilling to sign up or have only signed up for the minimum coverage.

Vilsack acknowledged that the program as structured does have some limitations. “Despite the fact that prices have come down a bit, that margin has not gotten below $8 by very much, and so the payments haven’t been very large. There is also a sequester element involved here, where the payments have to be cut as a result of sequester, so there may be a combination of factors,” he said. “Our hope is that folks take a look at this program. … This market fluctuates quite a bit, and we want to make sure producers are protected in case prices go precipitously down or  feed costs go way up.”

Will more producers sign up now that the deadline has been pushed to Nov. 20? It's hard to say, according to Dickrell. "Depending on what the market does, there may be more or less participation just based on that," he said.

Have you considered the Dairy Margin Protection Program for your operation? Did you enroll for 2015? 2016? Why or why not? Let us know in the comments. 

 

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Comments

 
Spell Check

Brian
Shelley, ID
9/23/2015 08:17 AM
 

  A support program without any supply management component will not work. Costs for this program are to high to justify a very high margin level. All estimates so far indicate no benefit to sign up for more than the basic coverage. MILC was a disaster for everyone but the very small producer.

 
 
Jayce den Hoed
Frederic , WI
9/23/2015 05:35 PM
 

  Why would anyone ever sign up when the highest level of protection doesn't even pay unless there is a disaster? If there is a disaster it doesn't matter because at that low of prices we are all broke anyways. All the governement wants to do is insure cheap food for everyone at the expense of the farmer.

 
 
Nathan Stoltzfus
Mifflinburg, PA
9/22/2015 07:26 PM
 

  This is a result of the leadership of this country, I for one, will not remain in the dairy industry if profitability goes that low that this poor excuse of protection will help with. MILC worked, this is a joke. No use extending the time for me. Not one of the CEOs in the Milk Industry work for this kind of money, and they think they are helping us out? I'm not that stupid.

 
 

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