Providing revenue protection for the dairy industry

he dairy state of Wisconsin, for example, has lost 20 percent of its dairy farms within the last five years. Despite the loss in total farms, Wisconsin still produced a record 30 billion pounds of milk in 2016. A similar thing is happening in most states, Utah included. The 2014 USDA Farm Bill included voluntary dairy farmer participation in the Margin Protection Program-Dairy (MPP). The purpose of this federal dairy income safety net was to protect the margins between milk prices and the cost of feeds cows eat. Initially a relatively high percentage of the nation’s dairy farms chose to participate in the program. Most of the operations opted for the catastrophic $4-per-cwt coverage level. Less than 10 percent of the enrolled dairy farmers elected to purchase coverage above $4 per cwt. Dairy farmer participation in this program continues to slide and dairy farm operations, even well-managed dairies, continue to go out of business. MPP has not met the expectations of dairy producers. Though milk prices have continued to decline since 2014, feed prices have been low, too. As such, MPP-Dairy margins did not fall substantially. MPP-Dairy made some payments in the sprint of 2015 and ’16, but these payments did not cover the allocated premiums and administrative costs paid by dairy farmers. The American Farm Bureau Federation estimates dairy farmers paid approximately $100 million in premiums and administrative fees, yet received only $12 million in program payments. MPP-Dairy has simply failed to deliver the protection dairy farmers need and expect.