Starting Friday, dairy farmers can enroll for 2018 coverage in the Margin Protection Program or they can choose to opt out of the program for 2018.
Agriculture Secretary Sonny Perdue decided dairy farmers should be able to withdraw from MPP Dairy Program and not pay the $100 administration fee for 2018 if they do not wish to continue in the program.
"The decision is in response to requests by the dairy industry and a number of MPP-Dairy program participants," said Rob Johansson, acting USDA deputy under-secretary for farm production and conservation.
The program was meant to help offer protection against the difference between the milk price and the cost of feed on a dairy.
The decision drew some praise. Jim Mulhern, president and CEO of the National Milk Producers Federation, said MPP has been a disappointment for producers. NMPF had suggested earlier to USDA to allow farmers the choice of opting out of the program.
“Today’s announcement to allow farmers to opt out of the program in 2018 is a welcome development, in that it acknowledges the widespread dissatisfaction among farmers enrolled in the program," Mulhern said. "Simply put, the way the program was enacted in the 2014 Farm Bill, it does not meet the needs of America’s dairy farmers today, and declining participation levels amply illustrate farmers’ disenchantment with the MPP. Farmers who choose to opt out of the MPP will then be able to enroll in the Livestock Gross Margin program for 2018."
Mulhern added that Congress needs to provide more resources for the program to make it a viable safety net.
The American Farm Bureau Federation also supported the decision to allow producers to exit the program. “Approximately 24,000 dairy farms, representing 80 percent of the U.S. milk supply, are currently enrolled in the program, however, this year only 2 percent of the milk enrolled participated at levels above the basic coverage option," said Zippy Duvall, president of AFBF. "The low participation rate is due to the poor performance of MPP in providing a viable safety net to dairy farmers."
Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Agriculture Committee, also praised Perdue's decision. "As we work to improve the dairy safety net in the next Farm Bill, this is an important first step to ensuring producers have effective options to manage risk in the interim," Stabenow said. "I look forward to continuing to work with USDA to expand and improve coverage options for our dairy farmers."
To opt out, a producer should not sign up during the annual registration period. By opting out, a producer would not receive any MPP-Dairy benefits if payments are triggered for 2018.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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