The Margin Protection Program

MPP-Dairy offers a protection plan which provides payments to dairy operations when the difference between the all-milk price and the average feed cost falls below a certain, producer selected, dollar amount.

Producers will be eligible for a basic level of margin protection for a small administrative
fee, and be able to purchase greater coverage for a premium.

The Secretary of Agriculture (Secretary) will use administrative fees collected to cover administrative costs incurred to carry out the margin protection program.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - See Regional Agency Offices.



Program Accomplishments

Not Applicable.

Uses and Use Restrictions

Milk is produced in all 50 states and the maintenance and expansion of existing markets for dairy are vital to the welfare of milk producers in the United States (U.S.).

The dairy industry has experienced dramatic structural changes at all levels of the marketing channel that have directly affected milk prices, dairy product sales, farm incomes, and other direct aspects of dairy profitability and volatility.

Low margins have been a producer complaint for some time.

In addition, low prices, high production costs, and oversupply have been issues for the dairy industry in recent years.

In order to address these concerns, MPP-Dairy was included in P.L.

113-79 to replace existing dairy price and income support programs.

The MPP-Dairy program is much like an insurance program in that the dairy operation selects a level of coverage, and pays a premium based on the amount of coverage (and an administrative fee).

As is customary with other insurance or insurance-like programs both agricultural and otherwise, the regulations only provide for coverage prospectively and contemplated that a party's level of coverage will remain unchanged unless during a designated enrollment period the party makes a different election.

The amount of coverage chosen by producers in a participating dairy operation requires two selections.

One is the margin trigger and the second is the amount of milk covered (which is based on a history of production).

Eligibility Requirements

Applicant Eligibility

All dairy operations in the U.S.

shall be eligible to participate in the MPP-Dairy program to receive margin protection payments.

A dairy operation must produce milk from cows in the U.S.

and must be commercially marketing milk produced at the time of enrollment and continue to market milk for the duration of the program.

A dairy operation may participate in the MPP-Dairy program or the Livestock Gross Margin for Dairy (LGM-Dairy) but not both.

LGM-Dairy is operated by the Risk Management Agency of the U.S.

Department of Agriculture (USDA).

However since the MPP-Dairy program is made available after potential applicants under MPP-Dairy have applied for coverage under LGM-Dairy, for the open enrollment period established for the 2014 and 2015 calendar year coverage only, a producer with coverage under LGM-Diary that would like to participate in the MPP-Dairy program must register to participate in the MPP-Dairy program during the open enrollment period established for calendar 2014 and 2015 and agree not to extend or obtain new LGM-Dairy coverage.

Beneficiary Eligibility

The ultimate benefit of the MPP-Dairy program will help protect farm equity and reduce financial losses that occur during times of low margins.

Credentials/Documentation

To participate in the MPP-Dairy program, an eligible dairy operation must have a production history determined for the dairy operation; register to participate during a signup announced by the Farm Service Agency (FSA); pay a $100.00 administrative fee annually for the duration of the MPP-Dairy program; select a coverage level ranging from $4.00 to $8.00 per cwt, in $.50 increments; and select a coverage percentage of dairy operation's production history ranging from 25 percent to 90 percent, in 5 percent increments. For an existing diary operation FSA will determine the production history from the highest of the 2011, 2012, and 2013 calendar years. For a new dairy operation (in operation for less than one year), FSA will determine the production history by either the volume of the actual milk marketings for the months the participating diary operation has been in operation extrapolated to a yearly amount or an estimate of the actual milk marketing of the participating dairy operation based on the herd size of the participating dairy operation relative to the national rolling here average data published by USDA. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is not applicable.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. A dairy operation must submit an accurate and complete contract to participate during the application period.The contract is prescribed by the Commodity Credit Corporation (CCC). Producers may obtain such contract in person, by mail, or by facsimile from any county FSA office. The form may be downloaded at http://www.sc.egov.usda.gov. Contract offers must be received at FSA by the close of business on the last day of the open enrollment period.

Award Procedures

An eligible dairy operation must complete and submit a contract; agree with all terms and conditions in the contract; comply with instructions issued by or for CCC; provide proof of milk production commercially marketed by all persons in the dairy operation; and provide any other supporting documentation to any county FSA office. Producers must certify to accuracy and truthfulness of the information in their contracts and supporting documentation.

Deadlines

Contact the headquarters or regional office, as appropriate, for application deadlines.

Authorization

The Agricultural Act of 2014, Title I, Part I, Section 1401, Public Law 113-79, 7 U.S.C 9051.

Range of Approval/Disapproval Time

Other - Not Specified.

Appeals

Any producer who is dissatisfied with a determination made may request reconsideration or appeal of such determination under 7 CFR part 11 or part 780.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

Statutory Formula: Title 7 CFR, Chapter 1430, Subpart C, Public Law 113-79. Matching requirements are not applicable to this program. MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

There are no restrictions placed on the time permitted to spend the program benefits. Method of awarding/releasing assistance: lump sum.

Post Assistance Requirements

Reports

Not Applicable.

Audits

Not Applicable.

Records

Producers approved for MPP-Dairy benefits must maintain and retain accurate records and accounts that will document that they meet all eligibility requirements for three years after the date of payment to the dairy operation. Destruction of the records three years after the date of payment shall be the risk of the party undertaking the destruction.

Financial Information

Account Identification

12-4336-0-1-351.

Obigations

(Direct Payments for Specified Use) FY 16 $10,678,513; FY 17 est $100,000; and FY 18 est $43,000,000 - Program payments began in Fiscal Year 2015.

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines, and Literature

Program is announced through news media. Regulations published in the Federal Register, 7 CFR Part 1430. CCC is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Information Contacts

Regional or Local Office

See Regional Agency Offices.

Headquarters Office

Danielle Cooke 1400 Independence Avenue, SW, Washington, District of Columbia 20250-0512 Email: danielle.cooke@wdc.usda.gov Phone: (202) 720-1919 Fax: www.fsa.usda.gov

Criteria for Selecting Proposals

Not Applicable.



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