California Ag Network

Tag: Dairy Margin Coverage Program

  • USDA Now Making Payments for New Dairy Margin Coverage Program

    The U.S. Department of Agriculture’s Farm Service Agency (FSA) opened enrollment for the Dairy Margin Coverage (DMC) program on June 17 and has started issuing payments to producers who purchased coverage. Producers can enroll through Sept. 20, 2019.

    “Times have been especially tough for dairy farmers, and while we hope producers’ margins will increase, the Dairy Margin Coverage program is providing support at a critical time for many in the industry,” said Bill Northey, USDA Under Secretary for Farm Production and Conservation. “With lower premiums and higher levels of assistance than previous programs, DMC is already proving to be a good option for a lot of dairy producers across the country.  USDA is committed to efficiently implementing the safety net programs in the 2018 Farm Bill and helping producers deal with the challenges of the ever-changing farm economy.”

    Authorized by the 2018 Farm Bill, DMC replaces the Margin Protection Program for Dairy (MPP-Dairy). The program offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. To date, nearly 10,000 operations have signed up for the new program, and FSA has begun paying approximately $100 million to producers for January through May. 

    May Margin Payment

    DMC provides coverage retroactive to January 1, 2019, with applicable payments following soon after enrollment.

    The May 2019 income over feed cost margin was $9.00 per hundredweight (cwt.), triggering the fifth payment for eligible dairy producers who purchase the $9.50 level of coverage under DMC. Payments for January, February, March and April also were triggered.

    With the 50 percent hay blend, FSA’s revised April 2019 income over feed cost margin is $8.82 per cwt. The revised margins for January, February and March are, respectively, $7.71, $7.91 and $8.66. 

    Coverage Levels and MPP Reimbursements

    Dairy producers can choose coverage levels from $4 up to $9.50 at the time of signup. More than 98 percent of the producers currently enrolled have elected $9.50 coverage on up to 95 percent of their production history.

    More Information

    On December 20, 2018, President Trump signed into law the 2018 Farm Bill, which provides support, certainty and stability to our nation’s farmers, ranchers and land stewards by enhancing farm support programs, improving crop insurance, maintaining disaster programs and promoting and supporting voluntary conservation. FSA is committed to implementing these changes as quickly and effectively as possible, and today’s updates are part of meeting that goal.

    For more information, visit farmers.gov DMC webpage or contact your local USDA service center. To locate your local FSA office, visit farmers.gov/service-locator

  • Dairy Producers Previously Enrolled in the Livestock Gross Margin Program Now Eligible for 2018 Margin Protection Program

    WASHINGTON — The U.S. Department of Agriculture (USDA) recently announced that dairy producers who elected to participate in the Livestock Gross Margin for Dairy Cattle Program (LGM-Dairy) now have the opportunity to participate in the Margin Protection Program for Dairy (MPP-Dairy) for 2018 coverage. Sign-up will take place March 25 through May 10, 2019.

    Producers enrolled in 2018 LGM-Dairy, administered by USDA’s Risk Management Agency (RMA), previously were determined by the 2014 Farm Bill to be ineligible for coverage under MPP-Dairy, a safety net program available through USDA’s Farm Service Agency (FSA).

    “The 2018 Farm Bill included substantial changes to USDA dairy programs,” said FSA Administrator Richard Fordyce. “This includes the ability for producers with LGM coverage to retroactively enroll in MPP-Dairy for 2018. It also integrated recent improvements to the MPP-Dairy in the new Dairy Margin Coverage program, beginning with the 2019 calendar year.”

    The MPP-Dairy program offers protection to dairy producers when the difference between the national all-milk price and the national average feed cost — the margin — falls below a certain dollar amount selected by the producers in a dairy operation. LGM-Dairy is an insurance product that provides protection when feed costs rise or milk prices drop. The gross margin is the market value of milk minus feed costs.

    This retroactive sign-up is only for dairy producers with 2018 LGM coverage who produced and commercially marketed milk in 2018 but did not obtain full year MPP-Dairy coverage. FSA will notify eligible producers by postcard and provide a one-time payment for all of the months in 2018 that had margins triggering MPP-Dairy assistance.

    “I’m pleased that dairy producers will now be able to take advantage of enrolling in both Livestock Gross Margin and the Margin Protection Program for 2018 coverage,” RMA Administrator Martin Barbre said. “The 2018 Farm Bill gave dairy producers more options like these and when combined with the new Dairy Protection Program offered by RMA, that means more overall coverage for dairy producers.”

    Eligible producers can enroll during the sign-up period at their local USDA service center. To locate your office, visit farmers.gov.

  • How the New Farm Bill will Assist California Dairy Producers

    While there has been a lot of talk about the new Farm Bill that finally passed, California dairy producers may be wondering how and if it will really impact them.  Aubrey Bettencourt, Executive Director of the USDA Farm Service Agency in California shared that it will, through the new Dairy Margin Coverage Program replacing the less impactful Margin Protection Program.  Watch this brief interview as Bettencourt explains and don’t miss the Farm Bill Implementation Listening Session of February 26th.