Margin Protection Program signup

Agriculture Secretary Tom Vilsack has announced that more than 23,000 dairy farms in the U.S. had enrolled in the Margin Protection Program (MPP), the new safety net program created by the 2014 Farm Bill.

Dr. Cameron Thraen, a dairy markets and policy specialist at Ohio State University says that number, which is over half of all dairy farms in the country, is in line with what both formal and informal surveys were showing.

“And we were seeing somewhere between 35 and 40 percent saying they had made the decision they would in fact participate, they didn’t indicate at what level, but they would participate in the program,” Thraen said. “So when the final numbers came out, I think it was an excellent number and probably somewhat anticipated.”

Because this is an annual decision, Dr. Thraen says the enrollment period for the 2016 production year will begin on July 1, 2015.

Meanwhile, dairy farmers continue to watch the markets.

Thraen, an Associate Professor in the Department of Agricultural, Environmental and Development Economics (AEDE) at Ohio State University tells Brownfield he believes dairy markets are near the bottom, at least in the U.S.

“We’re not looking at anything that looks like a calamity, so 2014 is going to be hard to beat because it was in fact a record year, both in terms of prices, lower feed costs, equity building,” said Thraen.

Dr. Thraen adds for those watching what’s taking place in New Zealand, whose prices have declined by more than 50%, it’s important to understand the differences. New Zealand is primarily an export dairy industry, while the U.S. has a broader market for its dairy products.

Audio: Dr. Cameron Thraen, Associate Professor, AEDE, Ohio State University

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