Low Milk Prices Have Dairy Farmers Concerned About Federal Insurance Safety Net

Associated Press writer Lisa Rathke reported earlier this week that, “Northeast dairy farmers who have been strapped for months by low milk prices say a voluntary insurance program that was supposed to be a safety net isn’t helping.

“The margin protection program provides financial assistance to enrolled farmers when the gap between the price of milk and national average feed costs falls below the coverage levels picked by individual farmers.

“‘It’s a complete failure,’ said Les Pike, of Keewaydin Farm in Stowe, Vermont, which has been losing money for months. ‘If it doesn’t pay in a year like this, it’s completely useless.'”

The AP article noted that, “Farmers say the margin protection program is not based on Northeast farmers’ feed costs but on the national average feed cost, which is less. The chairman of the National Milk Producers Federation testified in Washington last month that the program needs improvements. Randy Mooney, who is also a Missouri dairy farmer, said the formula for calculating feed costs was changed and no longer reflects the true cost of feeding a herd while the insurance premiums for farmers were not reduced.”

Ms. Rathke added that, “Legislation has been introduced in the U.S. House by Vermont Rep. Peter Welch, a Democrat, New York Rep. Chris Gibson, a Republican, and Democratic Rep. Joe Courtney of Connecticut that would amend the Farm Bill to require the Secretary of Agriculture to use data from each state to calculate average feed costs and dairy production margins for the insurance program.

“But there is a lot resistance to reopening the Farm Bill before it expires, Welch said. The current Farm Bill was passed in 2014 and expires in 2018, his office said.”

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