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Dairy Producers Have Option to Opt-Out of MPP Coverage for 2018

University of Minnesota Extension, Stearns County News
September 13, 2017        
Source:  Emily Wilmes, Extension Educator-Livestock
University of Minnesota Extension
Stearns, Benton & Morrison Counties

Dairy Producers Have Option to Opt-Out of MPP Coverage for 2018
By Emily Wilmes, University of Minnesota Extension

ST. CLOUD, Minn. (09/06/2017) — 2018 Enrollment for the Margin Protection Program opened on September 1, and will be open until December 15, 2017.  One change to the program this year is Secretary of Agriculture Sonny Perdue has given producers the option to opt-out of the program, even if they have been previously enrolled. 

In the original guidelines for the program, enrolled producers could adjust margin coverage levels and percentage of milk covered annually, but had to remain in the program until it expired at the end of 2018.  With this order, producers are no longer required to do so. 

To opt out, a producer should not sign up during the enrollment period. The decision would be for 2018 only and is not retroactive.  By withdrawing from the program, producers would not be required to pay the $100 administrative fee or any premium payments.  By opting out, a producer would not receive any MPP benefits if payments are triggered for 2018.  If there are questions about opting out, producers should contact their local Farm Service Agency (FSA) Office.

Dairy farmers still thinking about enrolling in the Margin Protection Program should consider waiting until later in the period to enroll.  Holding off until closer to the December 15 deadline will give producers more time to examine the markets and make predictions about margins for the coming year.  Producers choosing to remain in the program still have the option to purchase coverage in addition to the $4.00 catastrophic coverage level.

Opting out of enrollment in the Margin Protection Program would make a dairy producer eligible for the Livestock Gross Margin for Dairy (LGM-Dairy) program.  LGM-Dairy is a separate margin insurance program administered through the USDA’s Risk Management Agency.  From the Risk Management Agency’s website: “The insurance policy provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows. The indemnity at the end of the 11-month insurance period is the difference, if positive, between the gross margin guarantee and the actual gross margin. The LGM for Dairy Cattle insurance policy uses futures prices for corn, soybean meal, and milk to determine the expected gross margin and the actual gross margin. The price the producer receives at the local market is not used in these calculations.”


Emily Wilmes
Extension Educator, Ag Production Systems - Livestock
(320) 255-6169
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