USDA announced this morning that over 23,000 dairy producers signed up for the farm bill's new Margin Protection Program for Dairy or MPP-Dairy. That represents a brisk sign-up given that the nation's dairy producers are coming off a year of record milk prices.
That "more than half" total can be easily determined because commercial dairy producers must have a license to sell milk. And last year, 46,960 farms held permits to sell milk . . . since 1992, those numbers have dropped between 3.3 and 8 percent annually. Given average attrition, there are roughly 45,000 dairy farmers in the U.S. these days.
As those in dairy circles already know, the MPP-Dairy program provides financial assistance to participating farmers when the margin - the difference between the price of milk and feed costs - falls below the coverage level selected by the dairy farmer.
More than half of dairy farmers "bought up" coverage in the MPP-Dairy. That means at least 11,500 of those 23,000 enrollees purchased coverage above the $4 baseline that comes with the program's $100 sign-up fee.
With today's USDA announcement, we also know that the 23,000 farmers in the program will represent the low sign-up mark for MPP-Dairy.
Why?
Once a producer opts in, they are in the program for the duration of this farm bill.
As for state data, that should be available shortly. The Northeast Dairy Farmer Cooperatives newsletter, assembled by Bob Gray, reported Pennsylvania and Vermont totals last Friday. That should represent some of the extremes.
"In Pennsylvania, 2,256 producers signed up for MPP-Dairy which represents slightly over 30 percent of the Commonwealth's 7,000-plus producers," reported Gray. "Of that number, half bought up insurance in the $5.50 to $6.50 margin level.
"In Vermont, 582 producers signed up for MPP which represents slightly over 70 percent of the state's 816 producers. Of that group, 368 bought up insurance above the $4 level representing 63 percent of those that signed up for the program."
USDA and its associates deserve some recognition for getting the word out there on the MPP-Dairy program. There were over 500 public meetings and 60,000 direct mailings, not to mention detailed coverage in Hoard's Dairyman.
Dairy producers interested in enrolling in the MPP-Dairy for 2016 can register between July 1 and September 30, 2015.
Read more about USDA's take on MPP-Dairy.
(c) Hoard's Dairyman Intel 2015
January 12, 2015
