Margin Protection Program update

By Dianne Shoemaker, Field Specialist, Dairy Production Economics

The Dairy Margin Protection Program (DMPP) underwent a substantial change earlier this year resulting from language included in the 2018 Bipartisan Budget Act. Program enrollment was re-opened from April 9 through June 8, 2018. Significant changes benefiting dairy farmers included a one million pound increase in a farm’s production history eligible for new Tier 1 premium rates. This change meant that the first 5 million pounds of a farm’s annual production history was eligible for substantially reduced premiums. Tier 2 premiums applicable to any production history above 5 million pounds remained unchanged. Other changes included monthly margin calculations and payments of any indemnities, and the 2018 sign-up being retroactive to 1/1/18.

As a result of these changes and 2018’s challenging milk prices, 888 Ohio dairy farms enrolled in the updated MPP program according to the Ohio Farm Service Agency. By July 26, 876 of those farms had been approved. USDA Farm Service Agency announced that through July 11, $7,071,360 in program payments were processed for Ohio dairy farmers, averaging $8,072 before premium costs for the 876 approved farms. Individual farm payments vary depending on each farm’s production history and margin coverage selections.

On June 25, 2018, the Ohio Department of Agriculture’s Dairy Division reported 2,206 dairy farms in Ohio. This is a substantial decline from the 2,312 dairies recorded in October 2017. Since the Margin Protection Program was initiated in Sept. 2014, 1,091 Ohio dairy farms have established their production history with the USDA Farm Service Agency. The current sign-up is 81.39% of farms that have established base with the FSA, or 40% of all Ohio dairy farms. It is unlikely that Ohio would experience a near-100% enrollment as the large population of Ohio’s Anabaptist farmers are not likely to participate in this type of program.

Find more details about the new MPP program and resources at this link

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