Dairy producers looking for assistance in understanding the changes brought by the Margin Protection Program (MPP) now have a number of online resources to turn to, including two new online calculators.
The MPP Decision Tool allows producers to enter the details of their farm and receive farmer-specific MPP registration forms. It was developed by the University of Illinois, the National Coalition for Producer Education, the FSA and the National Program on Dairy Markets and Policy.
“With the MPP Decision Tool, dairy farmers can use farm-specific milk production variables in conjunction with daily CME Group futures prices as part of the consideration for coverage-level choices under MPP and LGM-Dairy,” said U of I agricultural economist John Newton.
“To highlight the strategic thinking that needs to occur during the registration and coverage modification process, dairy farmers using the MPP decision tool have the ability to analyze historical U.S. milk and feed prices,” Newton said. “This feature is for research purposes only, but provides the opportunity for dairy farmers to go back in time to determine how MPP would have worked as a risk management instrument had it been in place during prior years.
For dairy producers who would like to use their own predictions for milk, feed and margin price risk, or would prefer a different interface, the National Milk Producers Federation has separately developed a calculator that allows users to enter those values directly.
Newton says the MPP Decision Tool will soon be upgraded to include those options. Both calculators allow producers to use historical market data to see how the MPP would have performed, had it been established in previous years.
The NMPF has also released its calculator in the form of an Excel worksheet which can be downloaded from the Future For Dairy site.
USDA formally unveiled the Margin Protection Program in August. A three‐month sign up period opened Sept. 2, with farmers having until Nov. 28 to obtain coverage either for the remainder of 2014, all of calendar year 2015, or both.
—From NMPF and University of Illinois news releases
