The government announced a new approach to supporting dairy farmers, with enrollment to begin on Tuesday and conclude on Nov 28. The new Margin Protection Program, mandated by the 2014 farm law, will issue payments when the gap between feed costs and milk prices is narrower than the coverage level selected by a farmer. Participation is voluntary. Premiums are lowest for small farms.
Along with announcing sign-up for the margin protection program, Agriculture Secretary Tom Vilsack announced roll-out of a companion program that empowers USDA to buy dairy products for domestic donation whenever the margin is less than $4 between the all-milk price and national feed costs. The dairy products would go to food banks, soup kitchens and homeless shelters.
“We are rapidly implementing most of the major sections of the farm bill,” said Vilsack, citing progress on crop insurance provisions as well as the dairy program. Vermont Senator Patrick Leahy said the program prevents coverage of rapid increases in production on individual farms so “you’re not going to have speculators coming in and over-producing” with the idea of a federal bailout.
“It really is risk management for the 21st Century,” said Jim Mulhern of the National Milk Producers Federation, which backed the new program.
The Web-based “tool” to help farmers decide coverage levels is available here. USDA published the regulation for the new dairy program in the Federal Register and said it would take effect immediately. The notice is available here.