While the program may invoke trepidation or a blasé reaction from dairy farmers, those who sign up for the 2018 Margin Protection Program for Dairy (MPP-Dairy) will receive a payment on the initial 5 million pounds of milk (roughly 218 cows at 23,000 pounds of milk) produced this calendar year. That’s if you insure up to the $8 coverage level for 14.2 cents per hundredweight (cwt.). Given the margins everyone has faced this year, the program can help cover some financial losses from producing milk.
The math is that simple, but you must sign up prior to June 1, 2018, to receive the milk insurance coverage.
So, if you are reading this Hoard’s Dairyman Intel on its initial day of distribution, just three days remain to sign up for the MPP-Dairy at your local Farm Service Agency (FSA) field office.
Sign-ups have been slower
Those who have access to actual dairy farm sign-up data have indicated to us that MPP-Dairy sign-ups by individual operations are starting to approach, but still remain below the 2015 participation levels. That year (2015) was the peak participation for the program.
“It’s baffling,” said one official. “It’s going to pay out money! I can’t believe farmers aren’t signing up.”
Here’s the low down.
MPP-Dairy payouts to participating dairy farmers should occur for February to June milk. February and March benefits, based on the ratio of milk prices to feed costs, should more than cover premiums on the first 5 million pounds of milk. Those payment projections are already known.
With April payments projected to be higher than March, that will also be a net return on investment. On top of that, a sizeable payment for May could take place with a modest benefit in June.
Based on price forecasts, there won’t be payouts the rest of the calendar year.
Small dairy state issues
While the USDA’s Farm Service Agency has talented people working at local offices, in some small dairy states we are receiving word that there are a few bumps in signing up for the program. One dairyman who called us did not receive projections from FSA that matched the decision tool created by USDA. If that occurs, we suggest that you have the local FSA office call its state office or consult with equivalent staff in a larger dairy state.
Be persistent to get the information you need.