February 8, 2019

USDA Under Pressure To Quickly Implement Dairy Programs

 |  By: Mike Opperman

The new farm bill has a number of new programs available to dairy producers, and the government shutdown compressed timing of their implementation. House Agriculture Chairman Collin Peterson (D-Minn.) says he’s concerned that the new dairy provisions in the farm bill will be too complicated for USDA and insurance agents to evaluate in time to help producers decide what protection to buy, says Jim Wiesemeyer, Washington analyst with ProFarmer.

Under the farm bill producers can participate in three programs: Dairy Margin Coverage (DMC), Livestock Gross Margin (LGM-Dairy) and Dairy Revenue Protection (Dairy-RP).  Farmers can enroll all of their production in the DMC plus either the LGM-Dairy or Dairy-RP. While DMC is managed by USDA’s Farm Service Agency, the other programs are administered by USDA’s Risk Management Agency. 

“The biggest problem I think is it’s going to be very complicated,” says Peterson. “You can now potentially be in all three programs. That’s going to be a tough thing to figure out how to do that.”

Senate Ag Chairman Pat Roberts (R-Kan.) and ranking member Debbie Stabenow (D-Mich.), according to Wiesemeyer, sent a letter to federal banking officials who oversee farm lenders to remind them to consider new farm bill risk management options when making loans to dairy producers. 

“Because important USDA implementation resources and decision tools were delayed during the government shutdown, dairy farmers and their lenders might not fully account for the benefits they will receive under the new dairy safety net, which could require farmers to provide more collateral, pay a higher interest rate, or be denied altogether,” Stabenow said in a statement.