The Margin Protection Program
Program Objective
MPP-Dairy offers a protection plan which provides payments to dairy operations when the difference between the all-milk price and the average feed cost falls below a certain, producer selected, dollar amount. Producers will be eligible for a basic level of margin protection for a small administrative fee, and be able to purchase greater coverage for a premium. The Secretary of Agriculture (Secretary) will use administrative fees collected to cover administrative costs incurred to carry out the margin protection program. Not renewed with Agriculture Improvement Act of 2018; see Dairy Margin Coverage (Assistance Listing 10.127).
Eligibility
Eligible Applicants
- Unrestricted by Entity Type
- Unrestricted by Individual Type
All dairy operations in the U.S. shall be eligible to participate in the MPP-Dairy program to receive margin protection payments. A dairy operation must produce milk from cows in the U.S. and must be commercially marketing milk produced at the time of enrollment and continue to market milk for the duration of the program. A dairy operation may participate in the MPP-Dairy program or the Livestock Gross Margin for Dairy (LGM-Dairy) but not both. LGM-Dairy is operated by the Risk Management Agency of the U.S. Department of Agriculture (USDA). However since the MPP-Dairy program is made available after potential applicants under MPP-Dairy have applied for coverage under LGM-Dairy, for the open enrollment period established for the 2014 and 2015 calendar year coverage only, a producer with coverage under LGM-Diary that would like to participate in the MPP-Dairy program must register to participate in the MPP-Dairy program during the open enrollment period established for calendar 2014 and 2015 and agree not to extend or obtain new LGM-Dairy coverage.
How to Apply
Award Procedure
An eligible dairy operation must complete and submit a contract; agree with all terms and conditions in the contract; comply with instructions issued by or for CCC; provide proof of milk production commercially marketed by all persons in the dairy operation; and provide any other supporting documentation to any county FSA office. Producers must certify to accuracy and truthfulness of the information in their contracts and supporting documentation.
Program details & compliance
Description
MPP is a dairy risk management program available to dairy operations during the years of 2014 through 2018. Participating dairy operations select a margin coverage level and were paid when the margin triggers were below the selected level. MPP is very similar to Dairy Margin Coverage which is available to dairy operations today.
Mission Categories
Primary: Production and Operation
Use of Funds
Allowed Uses
Milk is produced in all 50 states and the maintenance and expansion of existing markets for dairy are vital to the welfare of milk producers in the United States (U.S.). The dairy industry has experienced dramatic structural changes at all levels of the marketing channel that have directly affected milk prices, dairy product sales, farm incomes, and other direct aspects of dairy profitability and volatility. Low margins have been a producer complaint for some time. In addition, low prices, high production costs, and oversupply have been issues for the dairy industry in recent years. In order to address these concerns, MPP-Dairy was included in P.L. 113-79 to replace existing dairy price and income support programs.
Required Documentation
To participate in the MPP-Dairy program, an eligible dairy operation must have a production history determined for the dairy operation; register to participate during a signup announced by the Farm Service Agency (FSA); pay a $100.00 administrative fee annually for the duration of the MPP-Dairy program. For 2018 coverage year only, a limited resources, beginning, veteran, or socially disadvantaged farmer or rancher, shall be exempt from the administrative fee; select a coverage level ranging from $4.00 to $8.00 per cwt, in $.50 increments; and select a coverage percentage of dairy operation's production history ranging from 25 percent to 90 percent, in 5 percent increments. For an existing diary operation FSA will determine the production history from the highest of the 2011, 2012, and 2013 calendar years. For a new dairy operation (in operation for less than one year), FSA will determine the production history by either the volume of the actual milk marketings for the months the participating diary operation has been in operation extrapolated to a yearly amount or an estimate of the actual milk marketing of the participating dairy operation based on the herd size of the participating dairy operation relative to the national rolling here average data published by USDA.