The new margin protection insurance program for dairy farmers, which was developed by the National Milk Producers Federation and enacted in the 2014 Farm Bill, was formally unveiled by Agriculture Secretary Tom Vilsack. NMPF said it is pleased with the overall provisions of the new program, and urged farmers to begin familiarizing themselves with what will be a “valuable tool” to help manage farms’ financial risks in the future.
“Today’s release of the new dairy program’s details is the culmination of five years of work by NMPF, the nation’s dairy cooperatives and other farm groups to create an important new safety net for dairy farmers,” said Jim Mulhern, President and CEO of NMPF. “We applaud the U.S. Department of Agriculture on its hard work during the past six months putting the final touches on the dairy provisions of Congress’s Farm Bill. While some of the issues we raised could not be fully resolved in the short time available to complete the rulemaking, we’re pleased with the final package.”
Mulhern said NMPF will be working in the coming weeks to help dairy farmers understand the importance of the new safety net program. He said the organization is updating its www.futurefordairy.com website with relevant information for farmers, including a spreadsheet of historical margin trends, and an online calculator that will allow farmers to enter pricing and production data to help them select insurance coverage levels in the future.
Every farm producing milk commercially is eligible to sign up for the new program. USDA said producers can sign up at their local Farm Service Agency offices starting on Sept. 2, and the sign-up period will run through November 28. This 13-week period will allow farmers to register for coverage for the last four months of calendar year 2014, as well as for the entire year of 2015. There is a $100 sign-up fee for each calendar year, which qualifies a farmer to receive free, basic margin insurance coverage. Once farmers pay that fee, they are enrolled in the MPP for its duration, through 2017, and must annually pay at least the $100 fee.
The MPP allows farmers to protect the margin between milk prices and feed costs. Producers will insure their margins on a sliding scale, and must decide annually both how much of their milk production to cover (from 25% up to 90%), and the level of margin they wish to protect.