A new program to help dairy farmers weather the tumultuous peaks and troughs of milk pricing got a boost from U.S. Agriculture Deputy Secretary Krysta Harden, who was touring Maine farms Monday.
The program, which acts as a safety net for dairy farmers when the cost of milk production exceeds the price at which they can sell it, opens for enrollment Wednesday.
It’s the type of program “we hope is never used,” Harden said while she was at Wolfe’s Neck Farm in Freeport. But she encouraged dairy farmers to look at the voluntary program and sign up if they think it’d be beneficial to their dairy operations. There’s an online tool to help farmers look at the numbers and make that decision.
“Producers really need to be running their own numbers, thinking about their own operations and making these kind of decisions themselves,” she said. “It doesn’t work for everybody, but it does provide that basic safety net. It will never make anybody completely whole. That’s not the purpose of it. It is to help them to continue to survive throughout the producing season and year so they can continue to stay on their dairy farms.”
Starting July 1, dairy farmers can enroll in the U.S. Department of Agriculture’s Margin Protection Program for coverage in 2016. The voluntary program, established by the 2014 Farm Bill, provides financial assistance to participating dairy operations when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer. This is the second year of the program.
“More than half of our nation’s dairy producers enrolled in the 2015 program, which exceeded our expectations for the first year of the program,” Harden said. “We are confident that dairy farmers across the country will again take advantage of this safety net program for 2016. USDA will continue outreach efforts, including partnering with cooperative extension services, to ensure dairy producers are fully informed about the protections that this safety net program can provide during periods of market downturns.”
Farmers remain in the program through 2018 and pay a $100 administrative fee each year. Producers have the option of selecting a different coverage level during open enrollment each year, according to a news release about the program. Margin Protection Program payments are based on an operation’s historical production.
An enhanced Web tool, available at www.fsa.usda.gov/mpptool, allows dairy farmers to combine their unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can also review historical data or estimate future coverage based on data projections.
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