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February 13, 2018

NMPF Urges USDA to Quickly Re-open Dairy Margin Protection Program

 |  By: Jim Dickrell

The National Milk Producers Federation (NMPF) is urging USDA to quickly re-open enrollment for the Dairy Margin Protection Program, which was revised last week by Congress and signed by President Trump.

In a letter sent to Agriculture Secretary Sonny Perdue, Jim Mulhern, NMPF president and CEO, says re-opening enrollment quickly would allow dairy farmers to sign up for margin protection at a time when milk prices are at a two-year low. “Congress was clear in the legislation that farmers be given the opportunity to elect or adjust their coverage for all of the 2018 calendar year,” Mulhern says. “Thus, it is critically important that the department move quickly to re-open enrollment and provide MPP coverage retroactive to Jan. 1, 2018.”

The January MPP milk-feed margin won’t be announced until the end of February. Thus, it is unknown whether a payment will be made since the December margin was still at $9.87/cwt with an all-milk price of $17.20.

The new legislation does a number of things:

• Raises the catastrophic coverage level from $4.00 to $5.00 for the first tier of covered production for all dairy farmers;

• Adjusts the first tier of covered production to include every dairy farmer’s first 5 million pounds of annual milk production (about 217 cows) instead of 4 million pounds, a recognition of the growth in herd sizes across the country;

• Reduces the premium rates, effective immediately, for every producer’s first 5 million pounds of production, to better enable dairy farmers to afford the higher levels of coverage that will provide more meaningful protection against low margins;

• Modifies the margin calculation to a monthly (from bi-monthly) basis, to make the program more accurate and responsive to producers in difficult months;

• Waives the annual $100 administrative fees for underserved farmers.

Mulhern also requested that USDA offer flexibility switching back to MPP from the Livestock Gross Margin (LGM) insurance program. “Current law does not permit farmers to enroll in both MPP and LGM run by the Risk Management Agency. Understandably, some producers currently participating in LGM may wish to switch to MPP,” says Mulhern.

“Therefore, we ask that you give producers one-time flexibility to terminate their LGM contracts if they wish to move to the revised MPP. At a minimum, we hope that USDA will give producers the ability to obtain partial year MPP coverage if their LGM coverage runs out sometime this calendar year,” he says.