Dairy Margin Protection Program Differs from MILC

Dairy Margin Protection Program Differs from MILC

Dairy producers can now sign up for the new Margin Protection Program.  National Milk Producers Federation CEO Jim Mulhern says this is the safety net crafted in the new farm bill and it’s a dramatic difference from the MILC program because it looks at income over feed costs.
Mulhern: “The program we have now is a margin protection. It looks at what is the difference between the all milk price and then a factor of corn, soybean and alfalfa prices combined together. The margin between those feed costs and the milk price is what people are going to be able to cover through this margin program.”
Mulhern says those margins are figured in two month increments and producers can insure from $4 to $8.
Mulhern: “And if the margin drops below a level of coverage that a producer has selected that could trigger a payment to close the gap between the target level of margin protection that they have paid a premium for and what they are experiencing in the market place.”
Dairymen must sign up for the program through 2018, but the catastrophic coverage level at $4 only costs $100. Each year following producers can decide the level of coverage for their operation.
Mulhern: “They can cover between 25 percent floor and 90 percent ceiling of their production history. Their production history is their highest production during either 2011, 2012 or 2013 — one of those three years base.”
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