Ask FSA Andy about the Dairy Margin Protection Program

0
15

Hello Again!

FSA has teamed up with OSU Extension to educate dairy producers on the new milk program called the Dairy Margin Protection Program, MPP-Dairy.

The FSA office will be explaining the nuts and bolts of the program and conducting the sign up and the OSU Extension will be helping the producer with the tools needed for deciding which option will best suit their operation. The dairy industry has been the cornerstone to our local agricultural economy for decades.

As with typical agricultural commodity products, the prices established for milk are driven by market supply and demand. Ask any local dairy farmer and they will tell you how volatile the dairy industry can be.

The 2014 Farm Bill initiated a new dairy risk management program to help dairy farms overcome the highs and lows of producing milk. The new voluntary program is called the Dairy Margin Protection Program (MPP-Dairy) and will be in effect through Dec. 31, 2018.

Dairy farmers have until Dec. 5, 2014 to decide whether or not to participate in this program for the remainder of 2014 and 2015. The MPP-Dairy program is operated through your local USDA Farm Service Agency.

The MPP-Dairy program offers protection to dairy producers when the difference between the all milk price and a calculated average feed cost (the margin) falls below a certain dollar amount selected by the producer. A major difference between this program and past payment programs is that the MPP-Dairy is based on average national feed prices and milk prices. It is not based on a producer’s personal operation.

Farmers will have to determine how the national margin relates to their own farm’s margin. Farmers can elect the extent of the coverage that they will need for their operation. The beginning level of coverage is considered Catastrophic Coverage (CAT). This will trigger payments to dairy farms when the margin between milk prices and feed prices drops below $4 per hundredweight (cwt).

The highest amount of coverage is 90 percent of the established production history from the farm. So if a farm produces 1 million pounds of milk, then 900,000 pounds will be used to calculate a payment. This CAT requires farmers to only pay a $100 administrative fee to be a part of the program at this level. Dairy farmers can annually select a higher coverage.

The margin coverage level ranges from $4 to $8, and the percentage of the milk production base production history can be selected from ranges of 25 percent to 90 percent. It can be overwhelming to consider all the options and combinations of price points and percentages. To help local dairy farmers learn more about MPP-Dairy program, OSU Extension has partnered with Farm Service Agency and offered workshops on the MPP-Dairy program across the state.

The OSU Extension Service has tools to help you decide in the option that is best for you at the following: http://dairy.osu.edu and http://go.osu.edu/2014dairyfarmbill.

Contact your local FSA Office by Dec. 5 to inquire about the program or to schedule an appointment to sign up. Addition information may be found by visiting the Ohio FSA website at: www.fsa.usda.gov/oh or the national FSA website at: www.fsa.usda.gov/FSA

That’s all for now,

FSA Andy

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

SHARE
Previous articleIn sickness and in health, consider others
Next articleUtilizing cover crops in our fields
FSA Andy is written by USDA Farm Service Agency county executive directors in northeastern Ohio.

NO COMMENTS

LEAVE A REPLY

We are glad you have chosen to leave a comment. Please keep in mind that comments are moderated according to our comment policy.

Receive emails as this discussion progresses.