With about a month remaining to sign up for the new Dairy Margin Coverage program, about 43% of all licensed dairies in the U.S. have enrolled.
Participation represents about 57% of U.S. milk production.
Nearly 17,000 operations have signed up for the insurance program meant to protect producers’ margin between nationally calculated milk price and feed costs.
About 21,000 producers participated last year in DMC’s predecessor, the Margin Protection Program.
“We’re encouraged by the number of dairy producers who have signed up for this new program, but we are hopeful that we will get more folks in the door,” Bill Northey, USDA under secretary for farm production and conservation, said in a press release on Monday.
The program is retroactive to Jan. 1, and indemnity payments are already assured for the first six months of the year for producers who signed up to cover a $9 or $9.50 margin. Producers who enroll their first 5 million pounds of milk production at a $9.50 margin are looking at a payout of nearly $27,000 at a cost of $7,600 for the annual premium and fee. Those who sign up at a $9 margin can expect a payout pushing $14,000 at a cost of $5,600.
With the current signup, USDA Farm Service Agency estimates total expected payout for 2019 at more than $219 million. The agency began issuing indemnity payments on July 11.
Every dairy farm would benefit from enrolling in the program, Alan Bjerga, senior vice president of communications for National Milk Producers Federation, told Capital Press.
“For smaller producers, it’s a genuine cushion against financial blows. And for larger producers, it offers inexpensive catastrophic coverage against economic calamity,” he said.
The revised program is geared for farmers with 5 million pounds of annual milk production, adding higher margin coverage and offering lower premiums.
But it also allows larger producers to lock in coverage at the highest margin levels for their first 5 million pounds of production without locking in expensive coverage for the remainder of their insured production.
It’s normal to get a rush of signup at the end of the enrollment period, but NMFP encourages producers not to wait, Bjerga said.
“The longer they wait, the less time there is to get questions answered and the greater the chance that unforeseen circumstances could lead to a missed deadline,” he said.
The enrollment period ends Sept. 20.
“And if anyone is waiting for more price data, we already have enough,” he said.
A calculated margin below $9.50 has already been determined for January through June and is expected for July.
“The DMC will be a net payout in 2019 for any producer who signs up. That’s the most important question, and an answer is already clear,” he said.
Wisconsin has the most enrollments at 4,832, followed by Minnesota at 1,865, New York at 1,779 and Pennsylvania at 1,511.
The tally in California is 578, 189 in Idaho, 176 in Washington and 102 in Oregon.