Dairy Margin Coverage
Signups for the Dairy Margin Coverage program started this past Monday and so far farmer signups have been steady.
An economist with the American Farm Bureau Federation expects a strong signup period for the Coverage program.
The Agriculture Department opened the sign-up June 17th and the program replaces the Margin Protection Program for dairy. Michael Nepveux, American Farm Bureau Federation economist, says the new program is based on dairy producers' average margins.
"Producers can elect a certain coverage level ranging from $4.00 to $9.50 a hundredweight. And, if that income over costs margin falls below that, producers are eligible for a payment. And this program has two different tiers of premiums. The tier-one premiums, which are more affordable, cover up to the first five million pounds of milk. Anything above that falls under the tier-two premiums," said Nepveux.
Producers can cover up to 95 percent of their production history under the program. Nepveux says producers can sign up now for the program.
"Most people are expecting a pretty high participation rate, particularly for that first five million pounds. We've already run the numbers on the first four months, which is what we have data for so far. Under the new DMC program, each of those first four months is expected to trigger a payment. If a farmer were to enroll at the $9.50 coverage rate, he would already have made back his money from enrolling in the program as well," added Nepveux.