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Serving: WI

Dairy Margin Protection Program Explained

Dairy Margin Protection Program Explained
Learn more about new farm bill program at Sept. 8 meeting in Juneau.

Cooperative Extension will be holding an informational meeting on Monday, Sept. 8 at 10 a.m. at the Dodge County Administration Building, Rooms F-G, 127 E. Oak St., Juneau. Mark Stephenson, University of Wisconsin's director of dairy policy analysis, will explain how the program works, what protection is offered, how much it will cost, and will provide a way to think about your personal decision process. The new program is not overly complicated, but the annual participation decision is more complex than the MILC program was.  

Dairy producers will sign up for this trigger level and select how much of their historic production to cover during a signup period once a year.

In February of 2014, President Obama signed into law the new Farm Bill. Under this bill, the old MILC program will go away and be replaced by a new dairy safety net referred to as the Margin Protection Plan for Dairy, or MPP-Dairy. Like MILC, this new program will be administered through your local Farm Service Agency office. The Livestock Gross Margin program for Dairy (LGM-Dairy) will continue to exist, but producers are eligible to participate in only one of these programs and will have to choose between them.

MPP-Dairy is an insurance-like product. It is a voluntary risk management program that provides payments to producers when the margin between the national all milk price and a national average feed cost falls below a chosen trigger level. Producers will sign up for this trigger level and select how much of their historic production to cover during a signup period once a year.  Increasing levels of coverage, up to an $8 margin, will have increasing premium costs. Catastrophic coverage at the $4 level and below will only require a flat, annual $100 administrative fee.

Dairy farmers and interested individuals are welcome to come and learn about MPP-Dairy and ask questions. We are expecting program signup sometime this fall. This is an important, new, risk management program that every dairy farmer should consider. 

For additional information or questions, please feel free to contact either LaVern or Kim at 920-674-7297 or [email protected].

Source: UW-Extension
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