MPP safety net kicks in for dairymen

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WASHINGTON — U.S. Agriculture Secretary Tom Vilsack announced Aug. 4 that approximately $11.2 million will be provided to American milk producers enrolled in the 2016 Margin Protection Program for Dairy (MPP-Dairy).

The payment rate for May/June 2016 will be the largest since the program began in 2014. Dairy producers who enrolled at the $6 through $8 margin trigger coverage level will receive payments.

The national average margin for the May/June 2016 two-month consecutive period is $5.76277 per hundred weight (cwt.), resulting in the following MPP payment rates:

Margin Trigger
Coverage Levels               Payment Rate/cwt.

$6.00      $0.23723
$6.50       $0.73723
$7.00       $1.23723
$7.50       $1.73723
$8.00       $2.23723

Regional Payments (# of operations)

Indiana: $190,870 (98)
Michigan: $209,381 (128)
New York: $403,859 (180)
Ohio: $263,013        (139)
Pennsylvania:   $586,075        (369)
West Virginia:   $3,852     (5)

The narrowing margin between milk prices and the cost of feed triggered the payments, as provided for by the 2014 farm bill.

Deadline

The enrollment period is currently scheduled to end Sept. 30, 2016, although a bipartisan group of legislators, including House Ag Committee Chairman Michael Conaway, House Ag Committee Ranking Member Collin Peterson, and Senate Ag Committee Ranking Member Debbie Stabenow, sent a letter to Vilsack July 21, asking him to extend the MPP sign-up to Dec. 31 to encourage additional participation.

“We understand the nation’s dairy producers are experiencing challenges due to market conditions,” said Vilsack. “Dairy operations enrolled in the 2016 MPP-Dairy program will receive approximately $11.2 million this month.”

About the program

Read more: Understanding the Margin Protection Program for Dairy

Be real when assessing your dairy risk

MPP-Dairy payments are triggered when the national average margin (the difference between the price of milk and the cost of feed) falls below a level of coverage selected by the dairy producer, ranging from $4 to $8, for a specified consecutive two-month period.

All final USDA prices for milk and feed components required to determine the national average margin for May/June 2016 were released on July 29.

To learn more about the Margin Protection Program for dairy, visit the Farm Service Agency at www.fsa.usda.gov/dairy or stop by a local FSA office. Producers may visit www.fsa.usda.gov/mpptool to calculate the best levels of coverage for their dairy operation.

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