USDA Secretary Sonny Perdue will allow dairy farmers to opt out of MPP-Dairy coverage in 2018.


Sign-ups for USDA’s signature dairy program — Margin Protection Program for Dairy (MPP-Dairy) — started taking place on September 1 for upcoming coverage in 2018. This year’s registrations come with a new twist . . . producers can opt out of 2018 coverage.

“Secretary Perdue is using his authority to allow producers to withdraw from the MPP-Dairy program and not pay the annual administrative fee for 2018,” said Acting Deputy Under Secretary for Farm Production and Conservation Rob Johansson. “This decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants.”

The opt-out essentially allows producers to save $100 in 2018. That $100 represents the annual fee for the $4 base coverage in the program. At the program’s onset, once farmers opted in to MPP-Dairy they remained in the program until the end of the current farm bill.

If producers do opt out for 2018, they would be ineligible for any coverage that year. Also, the decision is not retroactive. That means that any fees paid during previous years cannot be refunded.

To opt out, a producer should not sign up during the annual registration period that runs from September 1, 2017 to December 15, 2017.

Waning popularity

Dairy farmers have shown their frustration with the program based on sign-ups during its first three years. That’s because payouts have been slim. At last calculation, MPP-Dairy has collected $95 million in premiums and only paid out $12.2 million in indemnities.

Here are the sign-ups for the first three years:

• 2015: 24,748 farms signed up for MPP-Dairy with 13,860 paying for additional coverage above the $4 minimum. That was 56 percent of farmers.

• 2016: 25,663 farms signed up for MPP-Dairy with 5,799 paying for additional coverage above the $4 minimum. That was 22.6 percent of farmers.

• 2017: 20,314 farms signed up for MPP-Dairy with 1,507 signing up for additional coverage above the $4 minimum. That was 7.4 percent of dairy farmers in the program.

Full details on previous sign-ups can be found at: https://www.fsa.usda.gov/programs-and-services/Dairy-MPP/index

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(c) Hoard's Dairyman Intel 2017
September 4, 2017

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