The Dairy Margin Protection Program (MPP)

2018 Changes to the Margin Protection Program

The Margin Protection Program-Dairy (MPP-Dairy) was developed by the National Milk Producers Federation through a lengthy, detailed and deliberative process in response to the dairy industry financial crisis of 2009. However, when Congress eventually enacted the program in 2014, the MPP had been amended and diluted to the extent that it, too, fell short of providing the protection required of an effective farm safety net program. Over the next two years, NMPF staff gathered feedback on the program from producers across the country and compiled a set of proposals (1-page summary / 3-page summary) to help improve the program, which was approved by the NMPF Board on March 7, 2017.

In February 2018, Congress passed a $1.3 trillion spending bill that contained several dairy-related provisions, including reforms to the MPP. Those reforms are:

  • Raising the catastrophic coverage level from $4.00 to $5.00 for the first tier of covered production for all dairy farmers;
  • Adjusting the first tier of covered production to include every dairy farmer’s first five million pounds of annual milk production (about 217 cows) instead of four million pounds, a recognition of the growth in herd sizes across the country;
  • Reducing the premium rates, effective immediately, for every producer’s first five million pounds of production, to better enable dairy farmers to afford the higher levels of coverage that will provide more meaningful protection against low margins;
  • Modifying the margin calculation to a monthly (from bi-monthly) basis, to make the program more accurate and responsive to producers in difficult months;
  • Waiving the annual $100 administrative fees for underserved farmers;
  • Directing USDA to immediately reopen the program signup for 2018.

The disaster package also lifts the $20 million annual cap on all livestock insurance, including the Livestock Gross Margin (LGM) program. This will allow USDA to develop a wider variety of additional risk management tools that will be especially important for larger dairy producers and can complement the MPP.

NMPF has been updating its Future for Dairy website to keep producers aware and informed of these and future changes to the MPP.


To help dairy farmers understand the dairy Margin Protection Program, NMPF is providing a set of data examining how the MPP margin has varied over time, dating back to 2007.

A spreadsheet of tables listing feed and milk prices is available below as a PDF. The data points use the same calculations the USDA uses to administer the milk and feed prices used in the program.  

MPP Margins: January 2007 – December 2015  PDF


Latest News on the Margin Protection Program
 

April 3, 2018 - USDA Re-Opens 2018 Enrollment for New Dairy Margin Protection Program

February 13, 2018 - NMPF Asks USDA to Quickly Open Enrollment Period for Revised Margin Protection Program

February 9, 2018 - NMPF Statement on Congressional Passage of Dairy Policy Changes in Budget Package

February 8, 2018 - NMPF Supports Legislative Provisions to Improve Dairy Safety Net, Expand Risk Management Tools

January 24, 2018 - NMPF Statement on USDA’s 2018 Farm Bill & Legislative Principles

December 21, 2017 - NMPF Statement on Importance of Dairy Policy Changes in Disaster Aid Legislation

August 31, 2017 - NMPF Statement on USDA Announcement to Allow Farmers to Opt Out of Margin Protection Program


Other Resources

NMPF has also developed other resources to help dairy farmers become familiar with the Margin Protection Program:

For more information on the Margin Protection Program, visit www.futurefordairy.com.