Milk production covered in the dairy Margin Protection Program (MPP) and buy-up enrollment in 2017 are at the lowest level since the program was introduced, according to USDA Farm Service Agency statistics highlighting state-level participation in the farm bill program.
For the 2017 calendar year, 20,314 dairy operations covering 138 billion pounds of milk are enrolled in MPP. These totals represent approximately 49 percent of licensed dairy operations and 64 percent of U.S. milk production in 2017. .
What is MPP?
The 2014 Farm Bill eliminated milk price safety net programs and introduced the Margin Protection Program for dairy producers.
MPP is an insurance-style safety net program designed to protect dairy farmers against declines in the income-over-feed-cost margin, i.e. the difference between milk price and the cost of feed on a dairy.
MPP makes payments equal to the difference between the national average margin and a farmer’s selected coverage level. Coverage is available from $4 to $8 per hundredweight and farmers may cover up to 90 percent of their historical milk production history. Figure 1 highlights the MPP margin and the range of coverage options.
Participating dairy operations pay a $100 administrative fee each year, and then pay...