New Features of the 2016 Dairy Margin Protection Program

Dairy farmers who renew their Dairy Margin Protection Program plans for 2016 will run into a few new quirks, says Andy Novakovic, a dairy economist with Cornell University.

“Farmers who participated in the 2015 program will get an automatic increase to their Production History of 2.61%,” he says. This is based on the increase in national milk production from 2013 to 2014.

Those who enroll in the program for the first time will have their production history based on their highest annual milk production from 2011, 2012 or 2013. They are not eligible for increases in their farm’s histories until they are enrolled for one year.

Those who signed up for the program in 2014 or 2015 are automatically enrolled for 2016 at the $4 “catastrophic coverage” level. They will be charged $100 for this coverage. They can opt for more coverage, up to $8/cwt, by purchasing that increased coverage.

However, the 25% discount for annual coverage up to 4 million disappears in 2016. (The discounted premiums were offered to encourage sign-up the first years of the program.) “Farmers who elected buy-up coverage for 2015 will see that the premiums for the same coverage are essentially one-third greater for 2016 (and years thereafter,” says Novakovic.

You can read more on the program here.