While almost half of all dairy farms in the U.S. have made their annual elections for 2016 coverage under the Dairy Margin Protection Program, those waiting to enroll have only until Nov. 20 to make their elections.
Established by the 2014 Farm Bill, the dairy margin program provides financial assistance to dairy producers when the margin – the difference between feed costs and the price of milk – falls below the coverage level selected by the applicant.
"Despite the best forecasts, the dairy industry is cyclical and markets can change quickly," said USDA Farm Service Agency Administrator Val Dolcini. "This program is like any insurance product, where investing in a policy today will protect against catastrophic economic consequences tomorrow."
FSA estimates that based on current participation rates, had the program existed before the 2014 Farm Bill, producers in 2009 would have invested $73 million in premiums and received $1.44 billion in financial protection during that historically weak market period.
Enrolled dairy operations must pay a $100 administrative fee annually to receive basic catastrophic coverage. Greater levels of margin protection are available for a higher premium, and provide expanded coverage based on historic dairy production.