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Dairy Margin Protection sign-up starts Tuesday

U.S. Ag Secretary Tom Vilsack says sign-up for the new Margin Protection Program for dairy producers will run from September 2nd through November 28th.  If producers choose to not participate this year, they will be able to sign-up in future years but once they enroll in the program they must participate for the life of the Farm Bill through 2018.

The base price to participate will be $100 per farm per year.  That fee covers a $4 margin between the national all milk price and a feed cost formula determined by USDA using corn, soybean meal and alfalfa hay.  Final margins will be announced at the end of the month following each two-month period. For any two-month period in which margin payments are authorized, USDA will process producer payments quickly after the final margin numbers are announced. For example, if payments are authorized for January-February, final margins will be announced at the end of March, and program payments will be issued in early April.

Additional margin coverage may be purchased in 50-cent increments up to $8 on an annual basis.  After 2015 there will be a premium price difference between the first 4 million pounds of production and anything above that.

The premium can be paid in-full at sign-up or by February 1st or in two installments: 25% by February 1st and the remaining 75% by June 1st.

Production history will be established using the highest production from 2011, 2012 or 2013.  New herds without a history from those years will either establish a 12-month base or use the national average production per cow for a herd their size.  Any increase in the base will coincide with an increase in U.S. milk production.

USDA has an online calculator to help producers determine the level of coverage under the Margin Protection Program that will provide them with the strongest safety net under a variety of conditions. The calculator, available at www.fsa.usda.gov/mpptool allows dairy farmers to combine 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. The secure site can be accessed via computer, Smartphone, tablet or any other platform, 24 hours a day, seven days a week.

NMPF’s Jim Mulhern talks about the MPP 9:55 mp3

More details on the MPP from National Milk Producers Federation here:

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