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Economist says Dairy Margin Coverage ‘very large improvement’ over MPP

An agriculture economist recommends that dairy producers sign up for the Dairy Margin Coverage program provided in the 2018 Farm Bill. Joe Horner, at the University of Missouri, says it’s a big improvement over the Margin Protection Program in the 2014 bill. He tells Brownfield premiums are less than a third of what they were for the original program.

“Depending on how much milk production you’re covering, you’re either going to cover 100 percent of it or some percentage of it,” said Horner, from a Dairy Profit Seminar in Mountain Grove, Missouri, “but you’re still going to want to sign up for 5 million pounds of milk at a high level of coverage.”

During the series of five seminars this week, Horner is explaining to producers how they’d benefit from the program.

“For example, the margin this month was $8 income over feed costs and you bought the $9.50 insurance,” said Horner, “then you would be receiving $1.50.”

Horner also recommends Dairy Revenue Protection Insurance, especially when dairy prices recover.

“It allows producers to lock in a revenue guarantee, a minimum revenue guarantee up to five quarters into the future,” he said.

Seminars have taken place in Sedalia, Missouri, and in Springfield, Missouri. In addition to one Wednesday in Mountain Grove, Missouri, there is a session in Jackson, Missouri Thursday and in Union, Missouri on Friday.