USDA Secretary Tom Vilsack announced on Jan. 12 that more than 23,000 of the nation's dairy operations – over half of all dairy farms in America – have enrolled in the new safety net program created by the 2014 Farm Bill, known as the Margin Protection Program. The voluntary program provides financial assistance to participating farmers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.
"Enrollment far exceeded our expectations in the first year," said Vilsack.
"We're pleased that so many dairy producers are taking advantage of the expanded protection. USDA conducted a lot of outreach to get the word out. When you compare the initial enrollment rate for the Margin Protection Program to the longstanding federal crop insurance program, where participation ranges from 30 percent to 80 percent depending on the crop, it's clear that these outreach efforts made a difference."
During the three months of the enrollment period, the USDA conducted a robust education and outreach effort to the nation's dairy producers. The department held over 500 public meetings, sent out nearly 60,000 direct mailings and conducted more than 400 demonstrations of the Web-based tool designed to help applicants to calculate their specific coverage needs.
House Agriculture Committee Ranking Member Collin Peterson advocated for the program’s inclusion in the 2014 Farm Bill. In a recent statement, he said, "The Margin Protection Program will help dairy farmers better manage the risks associated with dairy production and help alleviate dramatic consumer price fluctuations at the grocery store.
"I am pleased so many producers took the time to learn about the new safety net and chose to enroll in the program. I hope that USDA will continue their outreach and education efforts so more producers can learn about the protection this program provides.”
The Margin Protection Program offers dairy producers a range of choices of protection that are best suited for their operation. Starting with basic coverage for an administrative fee of $100, producers can select higher levels of coverage at affordable incremental premiums. More than half of the applicants selected higher coverage beyond the basic level.
President and CEO of the National Milk Producers Federation (NMPF) Jim Mulhern said, in a statement,“The margin protection program is a welcome improvement to federal dairy policy, and comes at an important time to help farmers deal with what will be a more challenging economic outlook in 2015.”
Mulhern added, “The MPP is now the only widely-available tool to help farmers protect against both lower milk prices and higher feed costs. It represents a new paradigm in shared responsibility between farmers and the government to cover the cost of that insurance.”
The NMPF statement suggested that the sign-up extensions granted after Thanksgiving, coupled with a sharp downturn in milk price forecasts for 2015, encouraged additional participation prior to the Dec. 19 cutoff.
Dairy producers interested in enrolling in the Margin Protection Program for fiscal year 2016 can register between July 1 and Sept. 30, 2015.
To learn more about the Margin Protection Program, visit the Farm Service Agency (FSA) online or contact a local FSA office . PD
—Summarized by Progressive Dairyman staff from USDA, House Agriculture Committee and NMPF news releases
