February 4, 2019

Analyst Says Dairy Safety Net Is Strongest In 40 Years

 |  By: Anna-Lisa Laca

Through the farm bill, USDA is able to offer dairy producers a revised version of the Margin Protection Program, called Dairy Margin Coverage. Combine that new program with the dairy Revenue Protection Program developed by the American Farm Bureau and you have what Pro Farmer’s Jim Wiesemeyer says is the best safety net dairy producers have had in 40 years.


“[Dairy producers] have a multitude of what I think [are] the best dairy safety net options in this farm bill and some legislation that was approved and signed into law before that, and with some innovative risk management tools pushed by the American Farm Bureau Federation,” Wiesemeyer said on the Signal to Noise podcast on Friday. “So, they have some options to go through. In my over 40 years of covering foreign policy, I think this is the best dairy risk management language and programs that I've seen.”


Similarly, Randy Russell of the Russell group says the Dairy Margin Coverage program is one of the real strengths of the farm bill overall.  


“I really want to give Collin Peterson enormous credit on this,” he said on Signal to Noise. “I think they realized they needed to provide more attractive margin protections up at the higher levels. They also made it more accessible for dairy farmers 5 million pounds and below, which is I think a very positive thing.”


With so many options available and each farm’s own risk tolerance and cost structure, farmers need to make risk management decisions based on their own situation.


“I do think some of these capabilities that are out there to model where they think the market is going and what makes sense for various dairy farmers, those analytical tools will be very good for farmers to look at and decide what level of margin protection is best for them,” Russell said.