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USDA Dairy-coverage deadline extended

The U.S. Department of Agriculture has extended the deadline from Sept. 20 to Sept. 27 for dairy farmers to enroll in the Dairy Margin Coverage program for 2019. Enacted in the 2018 farm bill, the safety-net program offers risk protection to dairy producers when the difference between the all-milk price and the average feed cost – the margin – decreases to less than a certain dollar amount selected by the producer.

“More than 21,200 dairy operations have already signed up for (the Dairy Margin Coverage program), but we’re providing an additional week to help ensure interested producers have time to come into the office,” said Bill Northey, USDA Under Secretary for Farm Production and Conservation. “With smaller margins and increased feed costs, (the Dairy Margin Coverage program) has resulted in almost $230 million in payments disbursed.

“I know that some farmers may still be cautious given their experiences with former dairy-support programs, but producers who have not signed up yet should come into a local office to learn how much money the program can put into their pockets.”

Almost half the producers who have registered so far are taking advantage of the 25 percent premium discount by locking in for five years of margin-protection coverage. The Farm Service Agency has launched a new web visualization of Dairy Margin Coverage-program data. Margin payments have triggered for each month from January through July. Dairy producers who elect greater coverage levels could be eligible for payments for all seven months.

Under certain levels the amount paid to dairy farmers will exceed the cost of the premium. For example a dairy operation that chooses to enroll for 2019 with an established production history of 3 million pounds – 30,000 hundredweight – and elects the $9.50 coverage level on 95 percent of production will pay $4,275 in total premium payments for all of 2019. The operation will receive $15,437.50 in Dairy Margin Coverage payments for all margin payments announced to date. Additional payments will be made if calculated margins remain below the $9.50-per-hundredweight level for any remaining months of 2019.

“My message to those dairy producers who are hurting out there – don’t leave this kind of financial assistance on the table,” Northey said. “Producers across the country have told us that (the Dairy Margin Coverage program) is a great risk-management tool that works well, and it can work for you too.”

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