The sign-up deadline for the 2017 Dairy Margin Protection Program is this Friday, Dec. 16. Farmers must go their local Farm Service Agency office to renew coverage.
Western United Dairymen points out farmers can actually select two levels of coverage. They can take $4/cwt catastrophic coverage on 90% of their production history, and then select a different percentage at a higher coverage level.
"This feature is helpful for larger herds which would prefer to pay the lower premium rate by covering a smaller percentage of their operation for coverages $4.50/cwt and up, without giving up catastrophic coverage on most of their milk production," says WUD. "For example, a dairy could elect to cover 90% of its production history at $4/cwt, and 25% of its production history at $6.50/cwt. If this dairy's production history was 16 million pounds, premiums due would be $3,600 (40,000 cwt times 9¬¢/cwt)."
The $100 MPP administrative fee for the catastrophic coverage is due this Friday. But the premium for the additional coverage is not due until September 1, 2017.
Based on current futures prices, projected milk-feed margins are in excess of $10 for all of 2017.