margin protection paperwork

November 28. December 5. Now December 19.

With a third deadline for sign-ups for the Margin Protection Program for Dairy, (MPP-Dairy), one might guess that dairy producer acceptance of the program has been low. In reality, when you look at the comparison between the early days of crop insurance and the new dairy program, that isn't necessarily the case.

In just the past week, sign ups for the new MPP-Dairy program more than doubled, moving from 6,132 to 12,521 applications received by FSA offices as of Friday, December 5, reported USDA sources. Those 12,521 applications represent 26.67 percent of the nation's dairy producers given the fact 46,960 operations held permits to sell milk last year.

Of those who filled out paperwork to enroll in MPP-Dairy, 5,993 or 12.75 percent of the nation's dairy producers elected for additional premiums beyond the $4 catastrophic insurance coverage.

How does this compare to the rollout of crop insurance?

Crop insurance has a much longer history. Prior to the drought of 1988, seldom did insured acres climb above 50 million. Here are some modern-day milestones in coverage levels based on data reported by Joe Glauber, chief economist with USDA, at a recent meeting at the Federal Reserve Bank in Chicago:

  • In 1989, the year after a catastrophic drought, insured acres doubled to 100 million.
  • After two years of good yields, insured acreage slumped to roughly 80 million from 1991 to 1993.
  • Following the 1994 Reform Act (Farm Bill), some 225 million acres were insured by crop farmers.
  • After a slight drop-off to 190 million acres in 1998, insured levels rose steadily and approached 275 million by 2008.
  • By 2013, just shy of 300 million acres were insured. That was six times the pre-1988 drought coverage levels of 50 million acres.
One also must remember that there are many more crop farmers than the finite 47,000 dairy producers. By those barometers, dairy farmer acceptance of the MPP-Dairy has been much higher.

As for states with a higher-than-average sign up for MPP-Dairy as of December 5, these stand out:
  • Texas, 75 percent of dairy producers
  • New Mexico, 64 percent
  • Nebraska, 46 percent
  • Mississippi, 44 percent
  • Minnesota, 42 percent
  • Colorado, 41 percent
  • Oregon, 38 percent
  • Vermont and Virginia, 37 percent
Of the nation's largest dairy states, California had 32 percent sign up; Wisconsin, 30 percent; New York, 31 percent; Idaho, 18 percent; and Pennsylvania, 16 percent.

This will very likely be the only year there is an extended sign-up period for MPP-Dairy. For those who are still on the fence, you have two more weeks to make a decision or go without coverage.

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