Milk Producers Encouraged to Sign Up for Margin Program

(ARLINGTON, VA) With USDA reporting the first month of data for farmer payments under the new Dairy Margin Coverage program, the National Milk Producers Federation (NMPF) is encouraging producers to sign up for the program. The new $9.50 “margin” (the difference between the price of milk and the cost of feed) threshold for the first 5 million pounds of a dairy farmer’s production replaces the old $8 per hundredweight limit under the now-lapsed Margin Protection Program. NMPF says it may be better tailored to expected market conditions in 2019 and future years than less-comprehensive coverage. Under maximum coverage, a dairy operation would receive back more than its full annual premium with the January payment alone, if it signs up for coverage at the discounted five-year locked-in premium rate. If a farm signs up for this year only, it would still recoup most of its full-year premium from the January payout. Dairy Margin Coverage signup is scheduled to begin on June 17th. That means payment amounts for up to the first five months of the year may already be known when farmers sign up and coverage will be retroactive from January 1st.