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USDA opens dairy farm risk management program to P.R.

The Margin Protection Program, which replaces the Milk Income Loss Contract program, gives participating dairy producers the flexibility to select coverage levels best suited for their operation. (Credit: Carlos Anguita)

The Margin Protection Program, which replaces the Milk Income Loss Contract program, gives participating dairy producers the flexibility to select coverage levels best suited for their operation. (Credit: Carlos Anguita)

USDA Puerto Rico Farm Service Agency Executive Director Juan Ortiz-Serbiá, announced that starting today, island farmers can enroll in the new dairy Margin Protection Program. The voluntary program, established by the 2014 Farm Bill, provides financial assistance to participating farmers when the margin — the difference between the price of milk and feed costs — falls below the coverage level selected by the farmer.

The USDA also launched a new web tool to help producers determine the level of coverage under the Margin Protection Program that will provide them with the strongest safety net under a variety of conditions. The online resource allows dairy farmers to quickly and easily combine unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can also review historical data or estimate future coverage based on data projections.

Development of the online resource was led by the University of Illinois, in partnership with the USDA and the Program on Dairy Markets and Policy. DMaP partners include the University of Illinois, the University of Wisconsin, Cornell University, Pennsylvania State University, the University of Minnesota, Ohio State University and Michigan State University.

“The Margin Protection Program is an important tool that allows dairy producers to build a safety net that fits the needs of their operation,” said Ortiz-Serbiá.

The Margin Protection Program, which replaces the Milk Income Loss Contract program, gives participating dairy producers the flexibility to select coverage levels best suited for their operation.

“This program has the potential to assist dairy farmers throughout Puerto Rico,” he added.

Enrollment ends Nov. 28, 2014, for 2014 and 2015. Participating farmers must remain in the program through 2018 and pay a minimum $100 administrative fee each year. Producers have the option of selecting a different coverage level during open enrollment each year.

Dairy operations enrolling in the new program must comply with conservation compliance provisions and cannot participate in the Livestock Gross Margin dairy insurance program. Farmers already participating in the Livestock Gross Margin program may register for the Margin Protection Program, but the new margin program will only begin once their Livestock Gross Margin coverage has ended.

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This story was written by our staff based on a press release.
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