With the ongoing COVID-19 crisis teaching hard lessons on risk management throughout agriculture, and with dairy margins expected to be volatile during the next year, the National Milk Producers Federation is urging farmers to register for maximum 2021 coverage under the U.S. Department of Agriculture’s Dairy Margin Coverage program. Registration begins today.
The Dairy Margin Coverage emphatically proved its worth this year as payouts rapidly reacted to unprecedented price plunges and protected farmers exactly when they most needed help. Coronavirus-related volatility in dairy markets is expected to continue well into 2021, with Dairy Margin Coverage payments a possibility. That makes it essential that farmers include the coverage in the robust risk-management plans they will need to ensure financial stability.
Dairy Margin Coverage, the main risk-protection tool for dairy farmers enacted in the 2018 farm bill, is designed to promote stable revenues and protect against financial catastrophe on some or all of a farmer’s milk. Despite forecasts in late 2019 predicting that Dairy Margin Coverage assistance wouldn’t be needed by farmers in 2020, margins instead decreased to their worst levels in more than a decade in the first half of this year. That triggered payments that undoubtedly kept many participating dairies afloat. And unlike difficult-to-predict federal disaster assistance that’s provided via specific legislation or administrative action, Dairy Margin Coverage offers certainty in times of need, allowing for better financial planning and faster payment when necessary.
Dairy Margin Coverage offers extra options.
Affordable increased coverage levels permit all dairy producers to insure margins to as much as $9.50 per hundred on Tier 1 production history – first 5 million pounds. Recent margin trends in reference to that $9.50 threshold are included in the graphic.
Affordable $5 coverage offers meaningful catastrophic coverage for farms of all sizes.
Visit www.nmpf.org/policy_tags/dairy-margin-coverage for more information.
