Use new calculator to select your DMPP coverage level

By National Milk Producers Federation September 05, 2014 | 8:22 am EDT

The National Milk Producers Federation today launched an online, downloadable calculator to help farmers select coverage levels under the new federal dairy safety net, known as the Margin Protection Program for dairy (MPP). The calculator is located at www.futurefordairy.com/mpp-calculator.

The calculator allows farmers to enter their own milk production and commodity price data to gauge the new program’s likely impact on their operations. It complements a similar tool created by a consortium of land grant universities that is available through the Agriculture Department website.

A key difference between the two tools is that NMPF’s is available both online, and as a downloadable Excel file. Also, while the USDA tool is pre-programmed with market forecasts from the Chicago Mercantile Exchange, the NMPF tool allows farmers to input their own projections for milk as well as corn, soybean meal and alfalfa hay prices.

“Dairy farmers must make some important decisions in the coming weeks about how best to use the new insurance program,” said Jim Mulhern, President and CEO of NMPF. “This calculator, along with the other informational tools that NMPF has prepared, will help them learn about the program and make the best choices for the future.”

The calculator and other tools are available at www.futurefordairy.com, which is serving as NMPF’s information hub for the Margin Protection Program, as well as at www.nmpf.org.

NMPF was instrumental in crafting the new safety net over the last five years. It developed the program after extensive discussions with farmers in 2009 and 2010 and then worked with Congress to include the plan in the 2014 farm bill. More recently, NMPF worked closely with the Agriculture Department on implementation issues for the program.

USDA formally unveiled the MPP in August. A three-month sign up period opened September 2, with farmers having until Nov. 28th to obtain coverage either for the remainder of 2014, all of calendar year 2015, or both.

The new safety net helps protect against the kind of catastrophic losses many dairy farmers experienced in 2009 and again in 2012 by limiting volatility in producer margins caused by either low milk prices, high feed costs or a combination of both.

Producers will insure their operations on a sliding scale, deciding both how much of their milk production to cover and how much of a margin to protect. Basic margin insurance at $4 per hundredweight is available for a $100 registration fee. Above the $4 level, a premium is required.

The NMPF online MPP calculator comes with a printable instruction manual.

NMPF also is preparing a narrated slide presentation to walk through the entire MPP program. That video presentation will be available next week, also at www.futurefordairy.com.