Starting Sept. 2, dairy farmers will be able to enroll in the Margin Protection Program, a voluntary insurance policy program that will provide assistance to members in the event that they encounter unforeseen economic challenges.
Farmers who opt to attain insurance through the Margin Protection Program are able to choose the coverage level that fits them in order lessen the severity of economic disasters when there is a change in milk prices.
The program itself is designed to give financial assistance when the margin falls below the coverage level selected by the farmer, with the margin totaling the difference between the price of milk and feed costs.
“This new program is another example of this Administration’s commitment to provide effective safety net programs that allow farmers and ranchers to manage economic risks beyond their control,” said Agriculture Secretary Tom Vilsack. “And the supplemental web tool will empower the nation’s 46,000 dairy producers to make decisions that make sense for them.”
USDA also developed a web tool at fsa.usda.gov/mpptool to help dairy farmers determine the level of coverage that will provide them with the most benefits under the Margin Protection Program. Farmers are able to combine unique data and variables that apply to their individual situation to in order to calculate their coverage needs based on price projection.
“It is important for dairy farmers in California to look at the tools available through USDA,” said Lynn McBride, executive director with the California Dairy Campaign. “This is an important component needed to move forward and provide a safety net for dairy producers when milk prices change.”
With the program and the supplementary web tool, farmers are given the flexibility and control to select the coverage level that best suits them.
“I definitely think that local dairy producers will at least be interested in the minimum coverage,” said McBride. “The important thing is that each producer can make the decision regarding the level of coverage that suits their individual production needs.”
The program, which will replace the Milk Income Loss Contract program, comes as a result of the 2014 Farm Bill that was signed six months ago. Farmers who opt to participate in the program must remain through 2018 and pay a $100 minimum administrative fee and then a monthly charge depending on the coverage the farmer selects. Those interested will have until Nov. 28 to enroll for the 2014-2015 year.