Margin Protection Program attracts dairy farmers from across the United States

Jan 14, 2015

More than 23,000 dairy producers are signed up

By Diego Flammini, Farms.com

Milk producers around the United States aren’t taking any chances and protecting themselves and their profits by enrolling in the United States Department of Agriculture’s (USDA) Margin Protection Program.

The Margin Protection Program came as part of the 2014 Farm Bill. It’s a voluntary program that provides financial aid to dairy producers when the margin – the gap between the prices of milk and feed, fall below a coverage level selected by the individual producers.

There is a $100 administrative charge for enrolling and dairy farmers will receive catastrophic protection and multiple buy-up coverage options. Catastrophic protection means payouts will be given when the “national dairy production margin is less than $4.00 per hundredweight,” according to the Farm Service Agency.

Calculating the monthly milk margin can be tricky. It requires multiplying the corn, soy, and hay prices for the month by a specific set of numbers, adding the sum, and then subtracting it from the “All-Milk” price.

Agriculture Secretary Tom Vilsack and his team conducted an outreach program, holding public meetings and contacting dairy producers directly. As a result, more than 23,000, or over half of all dairy farms in the United States are taking part in this program.

"Enrollment far exceeded our expectations in the first year," said Vilsack in a release. "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."

Dairy farmers interested in enrolling for the 2016 Margin Protection Program can register between July 1 and September 30, 2015.

The top five dairy producing states are California, Wisconsin, New York, Pennsylvania, and Idaho.

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