Wisconsin Dairy Farmers Weigh Options For Risk Management

Wisconsin dairy farmers can now opt out of the federal Dairy Margin Protection Program thanks to a recent change by the U.S. Department of Agriculture.

Previously, farmers enrolled in the safety net program for the duration of the Farm Bill, a piece of legislation passed every four years by Congress that sets federal agriculture policy.

MPP pays farmers if things like price drops or other events happen that affect income.

“It seems like there’s been a lot of money that’s been put into the federal treasury and very little of it’s actually went back to dairy farmers,” said Darin Von Ruden, president of the Wisconsin Farmers Union. “The worrisome thing is probably that there isn’t anything on the table right now to replace it.”

But industry groups have been planning their own alternatives to MPP for the 2018 Farm Bill, a piece of legislation passed every four years by Congress that sets federal agriculture policy and includes funding for USDA programs.

The American Farm Bureau Federation has proposed a Dairy Revenue Protection plan that would be similar to crop insurance.

“It would kind of be a hybrid of MPP and using the future market,” said Karen Gefvert from the Wisconsin Farm Bureau. “It’s something that we’re interested in and supportive of moving forward as another tool in the toolbox for farmers to utilize for risk management.”

But some industry groups think MPP might be here to stay.

“Whether it’s the right answer or not, MPP is probably going to be preserved and slightly improved upon or there’s going to be some attempt to try to salvage the program and make it more functional and more appealing for farmers,” said John Holevoet from the Dairy Business Milk Marketing Cooperative.

Until then, Holevoet said farmers who don’t want to enroll in MPP can participate in another federal safety net, the Livestock Gross Margin program, or pursue individual risk management strategies through the futures market.