Dairy farmers have through the end of the month to sign up for the U.S. Department of Agriculture’s (USDA) Dairy Margin Protection Program (MPP), which is designed to help dairy farmers struggling with low milk prices and ever-increasing feed costs.
Recent changes to the program guarantee a positive benefit for more than 90 percent of the dairy farmers who previously participated in MPP, according to Dr. John Newton, director of market intelligence for American Farm Bureau Federation.
“Given that a large portion of the dairy farmers in the United States qualify for the low-cost Tier 1 coverage, and given that we know what the margins were for February and March, it’s a no-brainer for farmers to sign up for the MPP program in 2018,” Newton told AFBF’s Newsline. “Farmers that don’t sign up in 2018 that can cover at, or below, 5 million pounds of milk are leaving money on the table, quite frankly, if they do not take advantage of this opportunity.”
The previous version of MPP didn’t quite give dairy farmers the help they greatly needed, Newton noted. In the 2018 Bipartisan Budget Act, Congress made several key changes to the program.
“[Congress] designed [it] to make it much more affordable and to deliver program payments to farmers on a monthly basis, rather than every two months,” he said.
After Congress made those changes, USDA reopened signup, which closes June 1.
The revamped program will better help dairy farmers to protect themselves against the gap between milk prices and feed costs. Many of the changes relate to Tier 1 coverage, under which premiums are lower.
“The modifications made to the Margin Protection Program were really targeted to Tier 1 eligibility. They lowered the Tier 1 premium rates and increased Tier 1 coverage to 5 million pounds of milk, so any farmer in the United States that has a production history of 20 million pounds or less is eligible to cover in the Margin Protection Program 5 million pounds of milk,” Newton said.