Unlike grain producers, dairy farmers have an option to enroll or change coverage level each year through the new farm bill “safety net” program called Dairy Margin Protection.
It’s a voluntary program designed to pay out when income over feed costs falls below a selected coverage level between $4.00 and $8.00/cwt. However, the farm must be enrolled. Sign-up cost will vary by the pounds of milk and the cwt. margin each farm chooses to protect.
Those who signed up for higher levels of coverage ($7.00 to $8.00/cwt) last year have already received program payments in 2015, but the recent drop in milk prices and the uncertain outlook for future milk prices is why now is the time to re-consider enrolling in this program and/or update your level of coverage for 2016. The next sign-up deadline is September 30.