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$1.50 increase to DMC max coverage will make a difference

An ag economist says if policy changes in the 2018 Farm Bill were made in 2000, the dairy landscape would look a lot different.

“Over the 2000 to 2018 period, we would have made MPP payments 70 percent of the time at $9.50 which is the new highest coverage level.”

Scott Brown with the University of Missouri says increasing the maximum coverage level for farmers in the new Dairy Coverage Program by $1.50 matters.

“I don’t think it’s been great for anyone, but we’re seeing a transformation in the dairy industry from what it was in the past and it’s been not so much fun for dairy producers who have to be a part of it.”       

He says while small producers can still be efficient, larger producers have been able to survive the current downturn using economy of scales.

Under the new program, premiums on the first five million pounds of milk are significantly more affordable and should be able to provide better risk management strategies for smaller farms.