Vermont Business Magazine Senator Patrick Leahy (D-Vermont) announced Tuesday that the US Department of Agriculture will be reopening the enrollment next week for the much-improved Margin Protection Program for Dairy (MPP-Dairy). The changes implement improvements that Leahy included in the Bipartisan Budget Act in February to give Vermont dairy farmers a far more cost-effective risk protection option. Reopening enrollment is especially important now as dairy farmers are experiencing a difficult year with falling prices for their milk.
Leahy wrote and pressed for enactment of the reforms in his role as Vice Chairman of the Senate Appropriations Committee. Leahy also is a leading member and former Chairman of the Senate Agriculture Committee.
On Tuesday Agriculture Secretary Sonny Perdue shared that the USDA’s Farm Service Agency (FSA) has set the new enrollment period to run from April 9, 2018, to June 1, 2018, and to make the sign up period retroactive to January 1, 2018.
Leahy said: “Dairy farmers in Vermont and around the country are hurting. Today's open enrollment implements the lower insurance premiums that were passed in the Cohran-Leahy cotton and dairy relief package in February. I have had countless calls from Vermont dairy farmers in the past two months worried about their smaller milk checks and unsure of how they will make ends meet. The crisis is worsened by the approach of the Spring planting season and the many difficult decisions that farmers are now confronting. The changes announced today will help dairy farmers to buy meaningful levels of risk protection in the MPP-Dairy program. I strongly encourage all Vermont dairy farmers to evaluate the new and far lower premium rates for Tier 1 and to calculate their enrollment options, to help them decide on appropriate coverage levels so they can better weather this challenging year.”
Harold J Howrigan said: “As Chairman of the St. Albans Cooperative’s Board of Directors, I believe that the changes made to the Margin Protection Program are very positive and am hopeful it will be of benefit to our membership. We appreciate Senator Leahy’s leadership on this issue and his firm support of the dairy sector.”
Bob Wellington Sr., Vice President of Agri-Mark, Inc., said: “The changes made to the Margin Protection Program are significant and offer much needed financial support to dairy farmers. We thank Senator Leahy for his continued support and recognition of the economic importance of our dairy farms.”
Background on the Leahy-led dairy changes:
The MPP-Dairy protects dairy producers by paying them when the difference between the national all-milk price and the calculated national average feed cost (margin) falls below a certain dollar amount set by the producer.
Recent Leahy-led MPP changes:
- Calculations of the margin basis is monthly rather than bi-monthly.
- Premium rates for Tier 1 were substantially lowered, by 70% lower at the $8.00 margin level.
- Covered production is increased to 5 million pounds on the Tier 1 premium schedule.
- An exemption from paying an administrative fee for limited resource, beginning, veteran, and disadvantaged producers. Dairy operators enrolled in the previous 2018 enrollment period that qualify for this exemption under the new provisions may request a refund.
Dairy farmers have until June 1, 2018, to make new coverage elections for 2018, and that coverage election will be retroactive to January 1, 2018. For any farms that had previously signed up for this year, they must update their enrollment and evaluate if they would like to adjust their coverage level to take advantage of these important changes. Farmers will have until September to pay their premiums.
The USDA is working to update its web tool to help producers better review forecasted milk and feed prices, to determine the level of coverage they should select to provide them with the strongest safety net under the conditions they are expecting in this challenging year. The easy to use online resource will soon be available at www.fsa.usda.gov/mpptool, and should allow dairy farmers to quickly combine their own 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.
The USDA will be mailing out postcards advising dairy producers of these recent changes.