American dairy farmers feel a federal program designed to protect them against low milk prices isn’t working the way lawmakers intended it to.
Since the Dairy Margin Protection Program was implemented as part of the 2014 Farm Bill, dairy farmers have been paying $100 each year to be enrolled in the program. And some have even purchased additional premiums to protect themselves against falling milk prices.
But producers feel they haven’t received a proper return for their investment into the program.
“The way the program was designed was only to cover catastrophic events,” Cassie Monger, a dairy producer from Foley, MN, told Farms.com today. “And with milk prices where they’ve been and with margins so tight, we do feel we’re at a catastrophic point.
“(The program) seems to have failed miserably as a way to help farmers, and if we were to get to the point where the program actually pays out, we’d be entirely out of business.”
In its January WASDE report, the USDA lowered its milk price projections by about $0.80 per cwt to about $15.80 per cwt.
That’s a nearly $10 per cwt drop in price since the U.S. milk farm price reached $25.70 per cwt in September 2014.
Further, while the price of milk has gone down, the cost of production hasn’t. And that leaves farmers in a tough spot, according to Marty Hallock, a producer from Mondovi, WI.
“Prices are poor, there’s no doubt about it,” he told Farms.com today.
“When you start to add in feed costs and the fact a lot of our expenses stayed the same, I think many people thought the program would kick in. But there doesn’t seem like there’s much protection at all.”
Both producers suggested lawmakers take a closer look at the Dairy Margin Protection Program when creating the next Farm Bill.