By LEE MIELKE
Mielke Market Weekly
USDA Secretary Tom Vilsack announced Sept. 22 that he is extending the sign-up deadline for the dairy Margin Protection Program (MPP) until Friday, Nov. 20. Vilsack acknowledged that fall is a busy time for dairy producers and that the additional seven weeks for sign-up will help the decision-making process on using the MPP in 2016.
National Milk, which called on Vilsack to make the extension last week, praised the action, stating that it is "consistent with Congress’ goal in creating the program, a goal shared by NMPF, which is to maximize the opportunity for dairy farmers to utilize this crucial risk management tool."
But, Dairy Today’s Jim Dickrell, writing in his Dairy Talk blog, makes the point; "Left unstated is dairy farmer disgruntlement with the (MPP) program and its failure to pay out indemnities even though milk prices fell some 30 percent last year." Dickrell says, "An extension to Nov. 30 would allow farmers more time, obviously. But it would also give them a better read on futures markets and the likelihood of indemnities being paid. This is precisely what Congress wanted to avoid when it passed the 2014 farm bill."
"The fear then," he says, "was that allowing farmers to sign up just weeks before the next year’s program went into effect would allow farmers to milk the U.S. Treasury. There was real concern, since farms of all sizes can now participate, that government payouts could reach billions of dollars."
Meanwhile, Bob Gray, editor of the Northeast Dairy Farmers Cooperative’s newsletter, reports that 18 Northeast House members sent a letter to Secretary Vilsack and Farm Service Agency Administrator Val Dolcini, expressing concern with USDA’s feed price calculations used in determining MPP margin levels.
They suggest the USDA conduct a state by state survey of feed prices, noting that the feed price calculations don’t take into account the fact that Northeast dairy farmers generally have higher feed costs.