COLUMBUS, Ohio — Farmers can control many things, but not the weather or the markets. That unpredictability can disrupt farming operations.
The 2014 farm bill provides a safety net, in the form of the new Margin Protection Plan (MPP) for dairy. This is not automatic – farmers must enroll by Dec. 5.
The MPP shields against when the margin – the difference between the price of milk and feed costs – falls below the levels of coverage selected by participating dairy producers.
"MPP is a change in the federal dairy program in the farm bill that points the dairy program more towards risk management and gives farmers options," said Steve Maurer, state executive director for the Ohio Farm Service Agency (FSA). "It enables them to mitigate some of the risk either at a relatively low level or a higher level – they have options to buy up on that."
However, the safety net is not automatic, and the deadline is getting close, Maurer said. Dairy producers must visit the FSA office to enroll before Dec. 5 to lock in protections for 2014-15. For $100, dairy producers can cover 90 percent of their production at $4 margin swings. With affordable, incremental premiums, they can cover $8 margin swings.
Dairy producers who are not sure of how the MPP works or what it means should contact the FSA or university extension resources. USDA’s online resource can also help. Go to www.fsa.usda.gov/mpptool, type in "operation data" and explore price projections and market scenarios to determine how the program works, Maurer said.
By mid-November, only 10 percent of Ohio dairy farmers had signed up for the program.
"I think what has happened is, because dairy prices have been relatively good, people haven’t been paying much attention," Maurer said. "I suppose the lesson in that is that any time dairy prices are relatively good is the time to pay attention to what happens when they drop."
Maurer is making a push to remind producers that there are only a few more days to sign up. They should contact their FSA office and use the tool that has been provided to help calculate the risk. Producers can go online and do that. They can do it at the office, but they would be better off to do it online before visiting the office.
Everyone can share comments and help shape the MPP for the future. More than 90 percent of dairy farms are family-owned and operated, often by multiple generations. USDA is committed to supporting family farmers, but they need to hear from producers.
Submit comments via the regulations.gov website at http://go.usa.gov/GJSA or send them by mail to Danielle Cooke, Special Programs Manager, Price Support Division, FSA, USDA, STOP 0512, 1400 Independence Ave. SW, Washington, DC 20250-0512. Enrollment in the MPP ends Dec. 5, but comments will be accepted until Dec. 15.
