The 2014 Farm Bill authorized the Margin Protection Program (MPP-Dairy) for dairy producers. The new, voluntary risk management program replaces the Milk Income Loss Contract (MILC) program which expired.
MPP-Dairy offers protection to dairy producers when the difference (the margin) between the all-milk price and national average feed cost falls below a certain producer selected amount.
Eligible producers may purchase coverage for their dairy operation by paying an annual administrative fee of $100 and a premium, as applicable, for higher levels of coverage. Producers in the dairy operation will have to select a desired coverage level ranging from $4.00 to $8.00, in $0.50 increments and a desired coverage percentage level ranging from 25 to 90 percent, in 5 percent increments. Producers will also have to decide whether or not to participate in the MPP-Dairy Program or the Livestock Gross Margin program administered by the Risk Management Agency (RMA), but they will not be allowed to participate in both.
The Dairy Margin Protection Program decision tool is available online to help producers make coverage level decisions. Enrollment ends on December 5, 2014, for 2014 and 2015. Participating farmers must remain in the program through 2018 and pay a minimum $100 administrative fee each year. Producers have the option of selecting a different coverage level during open enrollment each year. Dairy operators will establish their production history during sign-up. Verification of the production records will be required. Dairy operations can obtain more information on MPP-Dairy at the FSA county office and online.