By RACHEL LANE

D.C. Correspondent

WASHINGTON, D.C. — The 2018 farm bill has been signed and the implementation of the programs should begin this summer; the roll-out of the new bill was the focus of the February Farm Foundation Forum in Washington, D.C.

The farm bill was signed by President Donald Trump the day before the month-long government shutdown began in December. Plans to roll out the bill had hardly started when they had to stop, but the USDA picked up planning as soon as employees returned to work.

There were limited changes in the farm bill compared to 2014, with little drastic change, so the roll-out should be straightforward. One of the biggest changes, the Dairy Margin Coverage (DMC) program, will allow farmers to make changes that are retroactive to Jan. 1, 2019.

Alan Bjerga, senior vice president of communications with the National Milk Producers Federation, said the changes to the dairy programs will allow more flexibility and high margins. He said dairy prices have fallen more than any other commodity since 2014.

In the 2014 farm bill, the members of the dairy community were divided on what was needed and the title ended up being one of the last decided. The final project, the Margin Protection Program, used the margin between the price of milk and feed cost.

Farmers could get free coverage at a $4 per cwt. margin, and many picked that option initially. Even farmers who paid for additional coverage were usually not getting high enough coverage. The formula used to determine the cost of feed meant they were not fully covered for the margin lost between feeding the cattle and selling the milk.

Corn prices were low in 2012 and 2013, so feed costs were low and the decisions made about the program reflected those figures. When feed costs increased in 2015, it was unexpected. The program worked so poorly that changes were made a year ago, with the Dairy Budget Act.

The DMC in the 2018 bill has small but significant changes from the 2014 farm bill. Large- and small-scale producers are divided. All producers of up 5 million pounds of milk – roughly the production of 200 cows – can get coverage up to $9.50.

After 5 million pounds, the large producers can get coverage up to $8 margins, where the previous plan stopped. The lower protection for larger producers is expected to help reduce the risk they will glut the market.

As margins in the next few years are expected to be about $8, Bjerga said the changes will be beneficial to farmers. He said producers and processors are on board with the new plan.

In fact, last week the USDA announced the January 2019 income over feed cost margin was $7.99 per cwt., triggering the first payment for eligible dairy producers who purchase the appropriate level of coverage under the DMC program. USDA Secretary Sonny Perdue also said signup for DMC will open by mid-June.

Tara Smith, vice president of Federal Affairs with Michael Torrey Associates, said the 2014 farm bill crop insurance plan was revolutionary and set a high bar for the USDA, but the 2018 bill's plan made few changes. Some things already done at the USDA were officially added, while minor changes in other areas will be easily implemented.

Most farmers said the programs worked and to leave the crop insurance programs alone, she said. “It's designed to have flexibility, I think that's part of why farmers say protect that program,” Smith explained. “Given all the uncertainty farmers are facing right now, hopefully crop insurance continuing on as planned will provide some continuity to farmers and their banks.”

Without the farm bill being passed, programs like Title 1 dairy would have expired, but crop insurance is a permanent law. There would have been no lapse in coverage. Since private companies deliver the program to farmers, the government shutdown did not impact most farmers in terms of getting answers about changes to crop insurance.

One of the biggest changes in the farm bill was the inclusion of a Foot-and-Mouth Disease vaccine bank. Over the next five years, the USDA will be able to use $150 million to research and set up the bank.

“The farm bill's multifaceted approach to surveillance, diagnostics and vaccines is critical to safeguard the health and well-being of our animals, rural economics and the safety of the food supply,” said Dustin Baker, National Pork Producers Council director of economics and domestic production issues.

“The United States has been ill-prepared to deal with a foreign animal disease outbreak for quite some time.”