USDA announced Thursday that dairy farmers will now have until Dec. 19 to sign up for the Dairy Margin Protection Program, authorized by the 2014 Farm Bill. The initial deadline had been extended previously, from Nov. 28 to Dec. 5.
The MPP protects participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below levels of protection selected by the applicant.
"Despite the best forecasts, weather and markets can change, so a modest investment today can protect against unexpected losses tomorrow," Vilsack said.
For about $100, a farmer can cover 90% of production at $4 margin swings, and with affordable incremental premiums, dairy farmers can cover up to $8 margin swings, Vilsack explained.
In addition, farmers who apply this year will receive a slight increase in production protection that will not be available in the future. Farmers who do not sign up for the Margin Protection Program for 2015 will forfeit the 1% base production increase.
"For a 400 cow operation, this would equate to an additional 80,000 pounds of milk that are eligible for coverage. It's a small step to take to ensure your business is covered," Vilsack said.
According to the National Milk Producers Federation, the extension allows producers who may have experienced a late harvest additional time to review coverage options.
"Many dairy farmers are just now taking the time to review their options and explore the need for the new MPP program," Jim Mulhern, NMPF CEO, said. "The most important New Year's resolution a dairy farmer can make for 2015 is using the new Margin Protection Program to take advantage of this opportunity to guard against the possibility of low margin conditions at some point in the next year."
Dairy producers can use the online resource on the FSA website to calculate best coverage levels for individual operations. Producers also can compare the data to see how the program would have helped in previous years, such as 2008, when margins dropped from $8 to $3 in three months.
Farmers also have a chance to share comments and help shape the Margin Protection Program for the future. Last month, USDA announced the extension of the opportunity for public comments on both the Margin Protection Program and the Dairy Product Donation Program until Dec. 15, 2014.
Comments can be submitted to USDA via the regulations.gov website.