Farm Bill awaits Trump’s signature
Bill offers protections for dairy industry

By Gay Griesbach - For Conley Media

Dec. 18, 2018

FILE - In this Oct. 23, 2018, photo, President Donald Trump speaks following a ceremony signing the "America's Water Infrastructure Act of 2018" into law in the Oval Office at the White House in Washington.

WEST BEND — The Agriculture Improvement Act of 2018 — better known as the Farm Bill — is awaiting President Donald Trump’s signature.

“The farm bill brings much-needed assurance that programs will be in place to help Wisconsin farmers survive these difficult times,” Wisconsin Farm Bureau President Jim Holte said.

The bill brings particularly good news for dairy farmers.

While University of Wisconsin- Extension Dairy Policy Analyst Mark Stephenson said 2014 Farm Bill protections for most crops remain largely unchanged in the 2018 bill, the safety net for the dairy industry has been significantly strengthened.

Stephenson said Title One provisions in the 807page bill have increased the threshold margins available, from a maximum of $8 to $9.50, in order to trigger indemnity payments for farmers.

Those payments are based on a formula that takes into account the difference between local and average U.S. milk prices and the calculated cost of feed required to produce 100 pounds of milk (cwt).

The margins have moved from as little as $2 in 2009 to $14 in 2014, but Stephenson said the average has been between $8 and $8.50 over time.

Dairy Margin Coverage, renamed from the 2014 Margin Protection Program, offers dairy farmers a better bet when covering production.

With the MPP, Congress collected more premiums than what was paid out.

For example, Stephenson said to be protected at the $8 level cost 47.5 cents per cwt. Premiums on the new DMC will be 10 cents per cwt.

Farmers can also sign up for protection for the full five years of the 2018 Farm Bill and get a 25 percent discount on premiums.

The amount of milk covered has also been increased on both high and low ends — instead of covering between 25 and 90 percent, new coverage ranges from 5 to 95 percent.

“That means larger dairy farms that have big historic production can cover a smaller percentage and get the bulk of their milk in (the program,) Stephenson said. “It’s also good for smaller farms.”

According to information from the Wisconsin Farm Bureau, dairy farms that participated in the MPP from 2014-2017 are to receive a repayment of a portion of premiums paid during that time period as either a 50 percent direct refund or a 75 percent credit toward future DMC premiums.

Time will tell if the new measures give the industry a much-needed boost.

Stephenson said annually, Wisconsin loses an average of 3 or 4 percent of its farms, not all necessarily dairy farms, through changes in the industry, consolidation, retirements and attrition. For 2018, that number is 7 percent.

In a good year, Stephenson said it isn’t unusual to have 35 or 40 farms go bankrupt. This year in Wisconsin, 50 out of 676 licensed dairy farms have gone out of business.

While bankruptcies are down slightly from what they were last year, producers are still feeling financial stress over five years of having production cover the cost of doing business.

The $867 billion bill contains income support, food and nutrition, land conservation, trade promotion, rural development, research, energy, forestry, horticulture and other miscellaneous programs administered by the U.S. Department of Agriculture. According to information from the Congressional Research Service, the Supplemental Nutrition Assistance Program accounts for about 80 percent of farm bill spending.

The other 20 percent is used to support farmers through crop insurance and conservation programs, investing in efforts to expand foreign markets and prioritizing agricultural research and rural development.

The 2018 Farm Bill can be found online at 20181210/CRPT115hrpt1072.pdf