USDA Announces Improvements to Dairy Margin Protection Program
May 6, 2016
The U.S. Department of Agriculture (USDA) announced several important improvements to the dairy safety net Margin Protection Program (MPP) last month, following recommendations from the National Milk Producers Federation about ways to improve the program.
One change ensures that all farms enrolled in MPP will receive catastrophic coverage at the basic $4 per hundredweight margin level on 90% of their production history – with the ability to purchase buy-up coverage at less than 90% of their history. This change is effective for the current 2016 coverage year.
While a majority of farmers using the program in 2016 are protected at the $4 level, for those who bought up a higher level of margin, but did not cover 90% of their milk production, this change ensures that they are still receiving catastrophic protection on the maximum level of production allowed by the MPP.
The second change allows a farm’s production history to be restructured in order to accommodate new family members joining a particular dairy operation. This will allow for the intergenerational transfer of production history for children, grandchildren, and their spouses to join a dairy operation.
“We very much appreciate these steps by USDA to implement administrative changes that will improve the program’s usefulness to dairy farmers,” said Jim Mulhern, president and CEO of NMPF. “USDA is constrained in what it can do to strengthen MPP, but the program must continue to evolve based on the experiences of NMPF’s members and others in the dairy industry.
Since MPP’s enactment in 2014, NMPF has worked with USDA to make the program a more flexible and effective national safety net for all of America’s dairy farmers. Mulhern said the program remains a work in progress, given the challenging on-farm milk price situation facing dairy farmers in 2015 and this year. “We will continue to work with USDA and the Congress to further improve and strengthen the program’s effectiveness,” he said.
The next enrollment period begins on July 1, and ends on Sept. 30, 2016. Each participating dairy operation is authorized one intergenerational transfer at any time of its choosing until 2018.
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