Margin Protection Program for Dairy

The Margin Protection Program for Dairy (MPP-Diary) is a voluntary program that helps dairy producers protect the financial "margin" between milk prices and the feed costs incurred to produce that milk. Dairy producers can choose among: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers of dairy operations when the national dairy production margin (defined as the difference between the national all-milk price and average feed costs) is less than $4.00 per hundredweight (cwt) and cover 90% of the production history. Producers may purchase buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt., and a coverage percentage of their existing production history. To participate in buy-up coverage, a producer must pay a premium that varies with the level of protection the producer elects. To receive coverage, a producer must enroll annually; pay the administrative fee, and premiums, as applicable.