Cows in milking parlor Kobby Dagan/ThinkstockPhotos

Dairy producers can register, withdraw from Margin Protection Program

Enrollment opens Sept. 1, 2017 and ends Dec. 15, 2017.

Starting Sept. 1, 2017, dairy producers can enroll for 2018 coverage in the Margin Protection Program (MPP-Dairy). They can also opt-out.

“Secretary Perdue is using his authority to allow producers to withdraw from the MPP Dairy Program and not pay the annual administrative fee for 2018,” said Acting Deputy Under Secretary for Farm Production and Conservation Rob Johansson. “The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants.”

To opt out, a producer should not sign up during the annual registration period. By opting out, a producer would not receive any MPP-Dairy benefits if payments are triggered for 2018. Full details will be included in a subsequent Federal Register Notice. The decision would be for 2018 only and is not retroactive.

“The American Farm Bureau Federation is pleased by today’s announcement by the Agriculture Department to allow dairy farmers to exit the Margin Protection Program for dairy producers,” said AFBF president Zippy Duvall.

The voluntary program, established by the 2014 Farm Bill, provides financial assistance to participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the producer. 

MPP-Dairy gives participating dairy producers the flexibility to select coverage levels best suited for their operation. Enrollment ends on Dec. 15, 2017, for coverage in calendar year 2018. Participating farmers will remain in the program through Dec. 31, 2018, and pay a minimum $100 administrative fee for 2018 coverage. Producers have the option of selecting a different coverage level from the previous coverage year during open enrollment.

Dairy operations enrolling in the program must meet conservation compliance provisions and cannot participate in the Livestock Gross Margin Dairy Insurance Program. Producers can mail the appropriate form to the producer’s administrative county FSA office, along with applicable fees, without necessitating a trip to the local FSA office. If electing higher coverage for 2018, dairy producers can either pay the premium in full at the time of enrollment or pay 100% of the premium by Sept. 1, 2018. Premium fees may be paid directly to FSA or producers can work with their milk handlers to remit premiums on their behalf. 

“Approximately 24,000 dairy farms, representing 80% of the U.S. milk supply, are currently enrolled in the program, however, this year only 2% of the milk enrolled participated at levels above the basic coverage option,” Duvall said. “The low participation rate is due to the poor performance of MPP in providing a viable safety net to dairy farmers.” 

USDA has a web tool to help producers determine the level of coverage under the MPP-Dairy that will provide them with the strongest safety net under a variety of conditions. The online resource, available at http://www.fsa.usda.gov/mpptool, allows dairy farmers to quickly and easily combine unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can also review historical data or estimate future coverage based on data projections. The secure site can be accessed via computer, Smartphone, tablet or any other platform, 24 hours a day, seven days a week.

Source: USDA Farm Service Agency, AFBF

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