The National Milk Producers Federation on Friday launched an online, downloadable calculator to help farmers select coverage levels under the new federal dairy safety net, known as the Margin Protection Program for dairy.

The calculator allows farmers to enter their own milk production and commodity price data to gauge the new program's likely impact on their operations. It complements a similar tool created by a consortium of land grant universities that is available through the USDA website.

NMPF's new calculator allows farmers to input their own projections for milk, corn, soybean meal and alfalfa hay prices

A key difference between the two tools is that NMPF's is available both online, and as a downloadable Excel file. Also, while the USDA tool is pre-programmed with market forecasts from the Chicago Mercantile Exchange, the NMPF tool allows farmers to input their own projections for milk as well as corn, soybean meal and alfalfa hay prices.

"Dairy farmers must make some important decisions in the coming weeks about how best to use the new insurance program," said Jim Mulhern, President and CEO of NMPF. "This calculator, along with the other informational tools that NMPF has prepared, will help them learn about the program and make the best choices for the future."

Related: Producers Can Enroll for Farm Bill's New Dairy Program Sept. 2

USDA formally unveiled the MPP late last month. 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.

The new safety net helps protect against the kind of catastrophic losses many dairy farmers experienced in 2009 and again in 2012 by limiting volatility in producer margins caused by either low milk prices, high feed costs or a combination of both, NMPF says.

Producers will insure their operations on a sliding scale, deciding both how much of their milk production to cover and how much of a margin to protect. Basic margin insurance at $4 per hundredweight is available for a $100 registration fee. Above the $4 level, a premium is required.

The NMPF calculator allows farmers to input their own projections for milk, corn, soybean meal and alfalfa hay prices. (Screenshot)

Source: NMPF