DEADLINE EXTENDED: State agriculture commissioner encourages dairy farmers to sign up for the margin protection program

State agriculture commissioner encourages dairy farmers to sign up for the margin protection program; deadline extended to June 8, 2018

June 1 deadline approaching for dairy farmers to enroll in one-year program; farmers could see payments as soon as June, no premiums due until September

State Agriculture Commissioner Richard A. Ball today encouraged New York’s dairy farmers to consider signing up for the Margin Protection Program – Dairy by the June 1 deadline. Earlier this year, the United States Department of Agriculture updated the MPP, changing the value of the program for small to midsize dairy producers, reducing premiums, and increasing coverage. Because the margins have already been calculated for the first months of 2018, farmers who sign up now—depending on the coverage level selected—could see payments as soon as June and would not be charged a premium until September. Farmers also have the option to offset their premium costs with their payment and not face any out of pocket expense, aside from the $100 administrative fee.

“For the past several years, MPP was flawed and not meeting the needs of our dairy farmers,” Ball said. “The changes made by USDA this year are a major improvement and almost guarantee farmers will receive financial relief, which is critical during these challenging times. I encourage farmers to review their options, use the online MPP Decision Tool and talk to staff at their local FSA to make an informed decision that is best for their family and operation.”

MPP pays dairy farmers when the difference between the national all-milk price and the national average feed cost (the margin) falls below a dollar amount elected by the producer. With the new MPP modifications, enrollment was re-opened and dairy producers now have until June 1 to enroll for 2018. Some of the key changes to MPP for 2018 are:

  • First tier of coverage was raised from four to five million pounds.
  • The cost of premiums for buy-up coverage on the first tier was cut by as much as 70 percent from previous levels.
  • The margin is calculated monthly, rather than a two-month average.
  • Limited resource, beginning, veteran and disadvantaged producers are exempted from paying the administrative fee. (Dairy operators enrolled in the previous 2018 enrollment period that qualify for this exemption under the new provisions may request a refund.)

The State Department of Agriculture and Markets is also encouraging farmers who are already enrolled in the program for 2018, to reevaluate their coverage options and, if they would like to make changes, re-register their election by June 1. Both new and existing enrollees can use the MPP Decision Tool or visit a local Farm Service Agency office to determine their coverage plan.

According to the USDA, farmers who sign-up at a certain coverage level should expect a payout from the new MPP for the February and March margins the week of June 4. The margin for the month of April is expected to be announced by USDA tomorrow, May 30.

The margins for the first three months of 2018 were:

  • For January 2018, the margin was $8.12 per cwt, so no payment was made at any level.
  • For February, the margin was $6.88 per cwt, leading to a payment of $1.12 per cwt if a farm selects the $8.00 coverage level.
  • For March, the margin was $6.77 per cwt, leading to a payment of $1.23 per cwt at the $8.00 coverage level.

All producers who want coverage for 2018 must register by close of business on June 1, 2018 by following these steps:

Payments under MPP-Dairy may be reduced by 6.6 percent due to a sequester order required by Congress and issued pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985. Should a payment reduction be necessary, FSA will reduce the payment by the required amount.

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