The Dairy Margin Protection Program
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- Created on Wednesday, 01 October 2014 21:59
- Written by Ryan Rutledge
AROUND THE NEK - Local farmers have a new option to protect their profits from the federal government; however, many have yet to sign up for the program. The Vermont Farm Service Agency will be holding informational meetings in the upcoming month to help educate farmers about the benefits of this program.
So, what is the dairy margin protection program? When milk prices go down, the program acts as an insurance policy, by subtracting the cost of feed from the average all-milk price. When that happens, farmers get a payment back for some of the money lost from the price-drop by covering feed costs.
Instead of bolstering profit for a producer in times of low prices, the program helps protect the farm's equity.
The baseline fee to register for the program is one hundred dollars, but like any insurance program, there are varying levels of coverage. The minimum coverage for milk dropping $4-per-one-hundred pounds of milk produced is free to all those who sign up. Costs for any other levels, up to $8 per one-hundred, are based off of how much milk is produced by the farmer buying into the program.
According to Caledonia County Farm Service Agency Director Patricia Passut, farms should invest in the coverage, but all farms are different and have different needs. "We're not pushing them to do anything because it is a voluntary program, and it's for them to look at everything and decide whats good for their operation and not what we think."
While the program can help even some of the smallest farms, there are some limitations to what the program covers.
"The program is just for producers who commercially market milk from cows," Passut said, "Goats and [others like] that are not eligable."
One local dairy farmer, Don Langmaid of Arshla Farm in Danville, is unsure of how the program may work, and if he'll see profits if the margins get too low.
"When [the difference] gets that bad [the program] won't make the difference...we won't see a profit, I don't believe, if this kicks in."
Langmaid did say, however, he does plan on enrolling to see what happens. He does remain cautious because the price of milk can be such a rollercoaster. Also with the program lacking a supply managment system, that makes a surplus of milk possible, which could greatly reduce the milk cost.
"If we have a surplus," Langmaid said, "Any surplus, like a three to four percent surplus... it has created a fourty-percent decrease in our pay."
Informational meetings will be held all across Vermont from October 13th to the 17th for farmers curious about what the plan can do for them.
For those who cannot attend and would like more information you can contact the Farm Agency State Office at (802)-658-2803.
