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The Livestock Gross Margin (LGM) for Dairy is a program offered by the RMA (Risk Management Agency) that works by insuring a dairy producer's projected margin--that is, a producer's projected milk revenue minus his projected feed costs, or his Gross Margin Guarantee--against the Actual Gross Margin. The Actual Gross Margin is the actual performance of the market--the prices set in the futures market for milk, corn, and soybeans. By insuring his product with the LGM's Gross Margin Guarantee, the producer is protecting himself from the volatility of the market (i.e. when milk prices drop or feed costs rise). For example, if a producer insures 5,000 cwt for the month of October and the projected milk revenue is $18/cwt and the projected feed cost is $3/cwt, the producer's Gross Margin Guarantee is $15/cwt. If during the month of October, the Actual Gross Margin drops below the $15/cwt insured by the producer, the producer is protected from the fluctuations of the market below that $15/cwt. The program does NOT cover changes in milk production due to cow mortality, disease, or other production shortages.
LGM Dairy offers a Federal premium subsidy of 18% for the $0.00 deductible policy and up to 50% for the $1.10-$2.00/cwt deductible. The next available enrollment period for the LGM Dairy program is October 2014, and payment is due at the end of each coverage period.
To enroll in the LGM Dairy program, or to hear more about what the program can offer you and your farm, please contact Amy Couch by phone at 802-524-2938, or email her at amy.couch@yankeeaca.com.
To see what your premium and Gross Margin Guarantee might look like, use the LGM Dairy Analyzer: http://future.aae.wisc.edu/lgm_analyzer/
To learn more about the LGM Dairy program and what it can do for your dairy operation, there are three information sessions available:
October 21st, 2014
11:00 am - 2:30 pm
St. Albans Cooperative Creamery
140 Federal Street
St. Albans, VT
October 23rd, 2014
6:00pm-8:30pm
Yankee Farm Credit, ACA
52 Farmvu Drive
White RIver Junction, VT
6:00pm-8:30pm
Yankee Farm Credit, ACA
52 Farmvu Drive
White RIver Junction, VT
October 28th, 2014
11:00am - 2:30 pm
UVM Extension Office
23 Pond Lane
Middlebury, VT
If you wish to attend either of these sessions, please RSVP with Amy Couch at 802-524-2938, or email her at amy.couch@yankeeaca.com. Space is limited at these meetings, and lunch will be provided.
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The Margin Protection Program for Dairy (MPP-Dairy) is a program created by the USDA (United States Department of Agriculture) in the 2014 Farm Bill. Similar to the LGM, the MPP-Dairy is a risk management program. The MPP-Dairy is a government safety net that offers protection to dairy producers when the margin--the difference between the national average milk price and the national average feed cost--falls below a certain dollar amount selected by the producer. Eligible participants enrolled in the program select a coverage level (between 25%-90% margin per cwt of their established production history) and a margin trigger (the margin level at which the program's margin protection payments kick in--anywhere from $4.50-$8.00 per cwt, in $0.50 increments). The producer's premium is based off of his level of coverage, as is his protection payment during times of compromised margin.
To participate in the MPP-Dairy program, a producer must meet certain eligibility requirements. The producer must produce and commercially market milk from cows located in the United States, must provide proof of milk production at the time of registration in the program, and must NOT be enrolled in the Livestock Gross Margin for Dairy (LGM) program.
The signup period for the program began September 2nd and continues through
Also: Participation in the MPP-Dairy or LGM programs is mutually exclusive: once registered for the MPP-Dairy program, a producer CANNOT participate in the LGM Dairy program until January of 2019.
Information sessions about the MPP-Dairy program are scheduled for the week of October 13th-17th in both Vermont and New Hampshire. The sessions are coordinated and conducted by the USDA Farm Service Agency (in partnership with the UVM and UNH extensions schools), and will run from 10:00am-2:00pm, Monday through Friday, on these dates and at these locations:
Vermont
- Monday, October 13, at the American Legion in St. Albans
- Tuesday, October 14, at the American Legion in Middlebury
- Wednesday, October 15, at the Holiday Inn in Rutland
- Thursday, October 16, at the Fairfield Inn in White River Junction
- Friday, October 17, at the East Side Restaurant in Newport
New Hampshire
- Southeastern New Hampshire Region: Merrimack, Hillsboro, and Belknap Counties: Monday, October 13, Merrimack County Cooperative Extension Office, 315 Daniel Webster Hwy, Boscawen, NH
- Grafton County Region: Tuesday, October 14, Grafton County Cooperative Extension Office, 3855 Dartmouth College Highway, North Haverhill, NH
- Southwestern New Hampshire Region, Sullivan and Cheshire Counties: October 15, Stuart and John’s Sugarhouse, Junction Routes 12 and 63, Westmoreland, NH
- The North Country Region, Coos and Carroll Counties: Thursday, October 16, Coos County Cooperative Extension Office, 629A Main St., Lancaster, NH
- The Seacoast Region, Rockingham and Strafford Counties: Friday, October 17, Rockingham County Nursing Home Auditorium, William Sturtevant Way off North Road, Brentwood, NH
- http://www.dairyherd.com/e-newsletters/dairy-daily/All-Dairy-Margin-Protection-Program-resources-in-one-spot-273088911.html
- https://www.farmcrediteast.com/Webinars/2014SeptDairyMPP.aspx
To use the MPP-Dairy program decision tool and see if the program is right for you, visit the USDA website at:
If you have any further questions about the MPP-Dairy program, please contact Amy Couch by phone at 802-524-2938, or email her at amy.couch@yankeeaca.com.
