USDA Announces Safety Net Assistance for Milk Producers Due to Tightening Dairy Margins

Agriculture Secretary Tom Vilsack on Thursday announced approximately $11.2 million in financial assistance to American dairy producers enrolled in the 2016 Margin Protection Program for Dairy.

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(USDA news release) WASHINGTON, Aug. 4, 2016 — Agriculture Secretary Tom Vilsack on Thursday announced approximately $11.2 million in financial assistance to American dairy producers enrolled in the 2016 Margin Protection Program for Dairy (MPP-Dairy). The payment rate for May/June 2016 will be the largest since the program began in 2014. The narrowing margin between milk prices and the cost of feed triggered the payments, as provided for by the 2014 Farm Bill.

"We understand the nation's dairy producers are experiencing challenges due to market conditions," said Vilsack. "MPP-Dairy payments are part of a robust, comprehensive farm safety net that help to provide dairy producing families with greater peace of mind during tough times. Dairy operations enrolled in the 2016 MPP-Dairy program will receive approximately $11.2 million this month. I want to urge dairy producers to use this opportunity to evaluate their enrollment options for 2017, as the enrollment period is currently scheduled to end Sept. 30, 2016. By supporting a strong farm safety net, expanding credit options and growing domestic and foreign markets, USDA is committed to helping America's dairy operations remain successful."

Dairy producers who enrolled at the $6 through $8 margin trigger coverage level will receive payments. MPP-Dairy payments are triggered when the national average margin (the difference between the price of milk and the cost of feed) falls below a level of coverage selected by the dairy producer, ranging from $4 to $8, for a specified consecutive two-month period. All final USDA prices for milk and feed components required to determine the national average margin for May/June 2016 were released on July 29, 2016.

The national average margin for the May/June 2016 two-month consecutive period is $5.76277 per hundred weight (cwt.), resulting in the following MPP payment rates:

   

 

Margin Trigger Coverage Levels

Payment Rate/cwt.

$6.00

$0.23723

$6.50

$0.73723

$7.00

$1.23723

$7.50

$1.73723

$8.00

$2.23723

State specific payment amounts can be found at www.fsa.usda.gov/dairy.

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