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May 31, 2017

Dairy MPP Participation Falls to All-Time Low

 |  By: Jim Dickrell

An analysis of farmer participation in the United States Department of Agriculture’s Dairy Margin Protection Program shows farmer participation fell to an all-time low in 2017, according to analysis by the American Farm Bureau Federation (AFBF).

Some 20,314 dairy farms signed up for coverage on 138 billion lb of milk in 2017, but 98% of that coverage was for the minimum, $4/cwt catastrophic coverage. The numbers show that 49% of dairy farms signed up with coverage of 64% of expected milk production in 2017. 

In 2016, 23% of farms opted for coverage above the catastrophic level, and in 2015, 56% chose higher coverage levels. In 2016, 12% of the milk that was covered was at levels above $4, and in 2015, 38% of the milk that was covered was above the catastrophic level.

No farms in Arizona, California, Nevada, New Mexico, Oregon and Wyoming signed up for any coverage above $4. And only 10 states, primarily in the nation’s mid-section, saw more than 10% of their farms sign up for something more than catastrophic coverage. Missouri, 19.8% of farms; South Dakota, 18.7% of farms and Nebraska, 16.2% of farms, had the highest levels above catastrophic coverage.

“While the program is working as designed by Congress, it has not met the expectations of dairy producers,” say AFBF analysts. “MPP offered little protection because the safety net is based on [milk-feed] margin and not milk price.”

Enrollment for the 2018 program opens in July and ends September 30. Note, however, that in previous years USDA has kept the enrollment period open longer to encourage participation.