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Enrollment for Margin Protection Program for Dairy begins April 9

There were three big changes to the program in Bipartisan Budget Act of 2018.

Congress made changes to the Margin Protection Program for Dairy in the Bipartisan Budget Act of 2018 and dairy producers may enroll from April 9, 2018, to June 1, 2018. 

"We recognize the financial hardships many of our nation’s dairy producers are experiencing right now,” Agriculture Secretary Sonny Perdue said. “Folks are losing their contracts and they are getting anxious about getting their bills paid while they watch their milk check come in lower and lower each month. The Bipartisan Budget Act provided some much-needed incentives for dairy producers to make cost-effective decisions to strengthen their farms, mitigate risk, and conserve their natural resources. We encourage dairy producers to review the provisions of the updated program, which Congress shaped with their feedback. Those changes are now in effect, and I’d ask any producers who are interested to contact their local USDA service centers.” 

About the program

The program protects dairy producers by paying them when the difference between the national all-milk price and the national average feed cost (the margin) falls below a certain dollar amount elected by the producer.

Changes include:

  • Calculations of the margin period is monthly rather than bi-monthly.
  • Covered production is increased to 5 million pounds on the Tier 1 premium schedule, and premium rates for Tier 1 are substantially lowered.
  • An exemption from paying an administrative fee for limited resource, beginning, veteran, and disadvantaged producers. Dairy operators enrolled in the previous 2018 enrollment period that qualify for this exemption under the new provisions may request a refund.

Make a choice

Dairy operations must make a new coverage election for 2018, even if you enrolled during the previous 2018 signup period. Coverage elections made for 2018 will be retroactive to Jan. 1, 2018. All dairy operations desiring coverage must sign up during the enrollment period and submit an appropriate form (CCC-782) and dairy operations may still “opt out” by not submitting a form. All outstanding balances for 2017 and prior years must be paid in full before 2018 coverage is approved. 

Dairy producers can participate in FSA’s MPP-Dairy or the Risk Management Agency’s Livestock Gross Margin Insurance Plan for Dairy Cattle (LGM-Dairy), but not both. During the 2018 enrollment period, only producers with an active LGM-Dairy policy who have targeted marketings insured in 2018 months will be allowed to enroll in MPP-Dairy by June 1, 2018; however, their coverage will start only after active target marketings conclude under LGM-Dairy. 

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. 

USDA is mailing postcards advising dairy producers of the changes. For more information, visit http://www.fsa.usda.gov/dairy or contact your USDA service center.

Source: USDA

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