Improvements made to Margin Protection Program

After several years of discussion with the National Milk Producers Federation (NMPF), DFA and other dairy leaders, U.S. Department of Agriculture (USDA) published a rule this week adding flexibility to the Margin Protection Program (MPP) that benefits the dairy producer community. To read about the changes made, follow this link.

The rule provides improved risk protection for dairy farmers who pay premiums to buy-up higher levels of coverage by clarifying that 90 percent of production is covered below the $4 level even if a lower percentage was selected above the $4 margin.
 
“Decoupling coverage options under MPP improves the ability of the program to offer effective risk management options to dairy farmers,” said Jim Mulhern, NMPF’s chief executive officer.

Another element of the announcement provides options for dairy farmers who are bringing in family partners. Now dairy farms participating in the MPP can update their production history when an eligible family member joins the operation.
 
“This change not only helps to strengthen a family dairy operation, it also helps new dairy farmers get started in the family business while ensuring that safety net coverage remains available for these growing farms,” said U.S. Secretary of Agriculture Tom Vilsack. 
 
Changes were made effective April 13, 2016. Any dairy operation already enrolled in the MPP and had an intergenerational transfer occur, will have an opportunity to increase the dairy operation's production history during the 2017 registration and annual coverage election period.
 
As a reminder, USDA now also allows the milk handler or dairy cooperative to assist producers in payment of their MPP premium by allowing for a milk check assignment. Producers who are interested in utilizing this option should visit their local Farm Service Agency (FSA) office.
 
Should you have questions about the margin protection program or other USDA programs, please contact DFA’s legislative staff at 816-801-6392.

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