Update on MPP-Dairy

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Below is a set of slides from a presentation on April 9, 2018, by dairy economists from Cornell & University of Wisconsin. In sum, the recent legislative updates to the Margin Protection Program (MPP) have trickled down to the Farm Service Agency who administers this program. The updated MPP Decision Tool will be available later this week.

Here are the main points from today’s presentation:

  • Dairy producers may enroll or re-enroll for January 2018 – December 2018 between April 9 and June 1, 2018. This includes retrospective enrollment for Jan – Mar, even if producers were not enrolled for 2018. (By June 1, MPP margins for Jan – Apr will be known with certainty.)
  • Any producers who enrolled for 2018 and who bought up coverage will be refunded premium payments and allow to re-enroll.
  • “Tier 1” volume is up from 4 to 5 million pounds of annual historic production.
  • Indemnity calculations are now based on monthly values, rather than 2-month average values.
  • Premiums for Tier 1 coverage are significantly less than before; premiums for production history over 5 million pounds have not changed.
  • MPP and LGM coverage is still not allowable for the same period.
  • Premiums will be based only on the months covered
  • Producers may still elect to cover between 25% and 90% of historic production
  • For producers who enroll more than 5 million lbs, the coverage level for Tier 1 and Tier 2 milk must be the same. For producers with production history above 5 million pounds, cover as close to 5 million lbs as possible; this strategy will work this year for less than 30 millions pounds of production history (approx. 1200 cows).
  • Expected 2018 net benefit requires at least coverage at $7.00

MPP-Dairy Update Presentation