NOW TO AG NEWS.
SMALL DAIRY FARMS IN WISCONSIN CONTINUE TO STRUGGLE AS MILK
PRICES REMAIN LOW, BUT DAIRY FARMERS JUST GOT AN EXTENSION TO
SIGN UP FOR A FEDERALLY-RUN INSURANCE PROGRAM DESIGNED TO
HELP WHEN MILK PRICES TAKE A DIVE.
THAT EXTENSION, THOUGH, RUNS OUT TONIGHT, JUNE 8.
ANDY SOTH HAS MORE ON THE MARGIN PROTECTION PROGRAM.
- TREMPEALEAU'S TOWN HALL SHARES ITS FACILITY WITH THE
LOCAL CURLING CLUB.
BUT ON THIS AFTERNOON IT'S ALSO HOSTING A MEETING OF DAIRY
FARMERS.
- SO THE PAYMENTS THAT YOU'RE DUE WILL BE COMING MORE QUICKLY.
- THEY'VE GATHERED TO LEARN MORE ABOUT RECENT CHANGES TO THE
MARGIN PROTECTION PROGRAM, THE FEDERALLY-RUN INSURANCE PROGRAMS
THAT AIDS THEM WHEN MILK PRICES ARE LOW.
- IT'S 100% PROBABILITY THAT WE'LL BE COVERED AT THESE
LEVELS.
- THE SPEAKER IS THE DIRECTOR OF THE UW'S CENTER FOR DAIRY
PROFITABILITY, MARK STEPHENSON, WHO'S VERY FAMILIAR WITH EFFORTS
TO SUPPORT DAIRY.
- WE'VE HAD DIFFERENT PROGRAMS OVER TIME, GOING CLEAR BACK TO
THE 19 -- LATE 1930s, EARLY '40s.
WE HAD A DAIRY PRICE SUPPORT PROGRAM.
AND THE IDEA THERE WAS THAT THE GOVERNMENT WOULD PURCHASE DAIRY
PRODUCTS OFF THE MARKETPLACE WHEN MARKET PRICES WERE LOW.
AND THAT WAS SOMETHING THAT AIMED TO IMPROVE MARKET PRICES
THEMSELVES.
IT WASN'T FOR AN INDIVIDUAL FARMER.
IT WAS TO MOVE PRICES UP FOR EVERYBODY.
- WHEN THAT PROGRAM WAS JUDGED TOO EXPENSIVE, IT WAS REPLACED
WITH THE MILK INCOME LOSS PROGRAM.
- THIS IS A DIRECT PAYMENT TO DAIRY FARMS.
IF PRICES FELL TO A CERTAIN LEVEL, WE WOULD WRITE YOU A
CHECK AND SAY HERE YOU GO.
- THAT PROGRAM WAS REPLACED IN THE 2014 FARM BILL BY THE MARGIN
PROTECTION PROGRAM.
TO COME UP WITH THE MARGIN, ECONOMISTS WORKED WITH DAIRY
NUTRITIONISTS TO CALCULATE HOW MUCH FEED IT TAKES TO PRODUCE
100 POW POUNDS OF MILK.
90% OF THE PRICE OF THAT FEED IS SUBTRACTED FROM THE MARKETPLACE
FOR A HUNDREDWEIGHT.
THAT MAKES UP THE MARGIN.
WHEN THE MARGIN IS SMALL, AS IT WAS IN THIS EXAMPLE FOR MARCH OF
THIS YEAR, ANY PROFIT IS UNLIKELY.
THE MARGIN PROTECTION PROGRAM KICKS IN WHEN THAT MARGIN IS $8
OR LESS, PROVIDING PAYMENTS FOR PRODUCERS DEPENDING ON THE LEVEL
OF PROTECTION THEY'VE BOUGHT INTO.
- SO IT IS AN INSURANCE TYPE PRODUCT.
FARMERS HAVE TO MAKE A DECISION ABOUT HOW MUCH PROTECTION DO I
NEED, JUST LIKE WE WOULD FOR AUTO INSURANCE OR FIRE
INSURANCE, AND YOU HOPE YOU DON'T HAVE AN ACCIDENT, BUT IF
YOU DO, THEN IT SHOULD PAY.
- RECENTLY, IT HAS PAID.
- AND I'M HERE TO TELL YOU WE NOW KNOW WHAT THE FIRST THREE
MONTHS ARE, AND TWO OF THOSE MONTHS WOULD HAVE HAD PAYMENTS.
- BUT MANY DAIRY PRODUCERS WERE NOT ENROLLED.
SO CHANGES TO THE PROGRAM ENACTED IN FEBRUARY AS PART OF
CONTINUING FEDERAL FUNDING LEGISLATION ESSENTIALLY GAVE
SOME FARMERS A DO-OVER.
NOT ONLY WAS THE TIME FRAME TO SIGN UP REOPENED, BUT BENEFITS
CAN BE CLAIMED EVEN FOR THE TIME BEFORE FARMERS ENROLLED.
- THIS IS UNUSUAL BECAUSE IT'S RETROACTIVE.
WE GET TO GO BACK AND MAKE A DECISION ABOUT THE ENTIRE YEAR
AND WE ALREADY KNOW THAT WE WOULD BE RECEIVING PAYMENTS AT
SOME OF THESE LEVELS OF PROTECTION.
THE NICKEL AND A HALF THAT IT COSTS YOU TO BUY ADDITIONAL UP
TO THIS LEVEL OF COVERAGE IN PREMIUMS IS COVERING UNDER 50
CENTS WORTH OF PAYMENTS, OKAY?
SO I SPEND A NICKEL, I GET 50 CENTS.
THAT'S THE ONE TIME THAT YOU WON'T HEAR AN ECONOMIST GOING,
YOU KNOW, ON THE OTHER HAND.
NO.
THERE IS NO OTHER HAND HERE.
- THE PROGRAM IS HARDLY A PANACEA.
THERE ARE MANY FACTORS TROUBLING THE DAIRY INDUSTRY.
BUT EVERY LITTLE BIT HELPS.
WHICH IS WHY IT'S SO IMPORTANT TO GET THE WORD OUT.
- THERE'S BEEN A BIG EDUCATIONAL EFFORT TO TELL
FARMERS ABOUT THAT AND THAT THEY NEED TO GO BACK AND RETHINK
THEIR ENROLLMENT.
- SUPPORT FOR ANDY SOTH'S REPORT WAS PROVIDED BY THE
O'BRIEN FELLOWSHIP IN PUBLIC SERVICE JOURNALISM.