WASHINGTON — The U.S. Department of Agriculture’s Farm Service Agency opened enrollment for the Dairy Margin Coverage program June 17 and has started issuing payments to producers who purchased coverage. Producers can enroll through Sept. 20.
Authorized by the 2018 Farm Bill, this program replaces the Margin Protection Program for 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.
Dairy producers can choose coverage levels from $4-9.50 at the time of sign up. More than 98% of the producers currently enrolled have selected $9.50 coverage on up to 95 percent of their production history.
May margin payment
The program 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, triggering the fifth payment for eligible dairy producers who purchased the $9.50 level of coverage.
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.
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