Va. margin program ‘a big deal’ for farmers

RICHMOND, Va. — Virginia’s new Dairy Margin Coverage Premium Assistance Program becomes reality July 1. This elective program is a victory for the Virginia State Dairymen’s Association, which worked for it for some time.
“It’s going to be a big deal for dairy farmers,” Eric Paulson, the association’s executive director, said in a telephone interview.
He explained this is an elective program to reimburse Virginia dairy farmers’ tier-one premiums for the Dairy Margin Coverage program.
Gov. Ralph Northam signed the legislation into law in March.
“This bill has been one of VSDA’s main priorities in Richmond in recent years and is finally across the finish line and signed into legislation,” Paulson said.
He said that the Virginia Agribusiness Council and Virginia Farm Bureau were key partners in getting this legislation passed.
“This program was funded for one year at $1 million and is first come, first served with a deadline of Feb. 1. 2022,” Paulson said. “If the program is successful, VSDA will go back to the legislature and advocate to have it funded again for the following year. We are hopeful to have this be an ongoing program that will help promote good stewardship and economic stability to Virginia’s dairy farms.”
The program will be administered by the Virginia Department of Agriculture and Consumer Services.
Paulson outlined the program to association members in a recent column in their news magazine.
“The program itself is fairly straight forward,” he said. “It has three criteria.”
The first step is for dairy farmers to sign up for DCM coverage for 2020 through their local Farm Service Agency (FSA) office.
Next each farmer must have a Nutrient Management Plan (NMP) from a certified plan writer or have one under review.
Third, the farmers need to fill out and send in a form to VDACS certifying that they have completed the first two steps and paid the DMC premiums.
He said VDACS will then reimburse the producer for their tier one coverage DMC premiums.
Paulson said that while the legislation starts the program July 1 it will not be up and running until VDACS has developed the procedures it will follow in running the program. The state agency has been working to get the working plan up and running as soon as possible, he indicated.
“Virginia has made NMPs a key part of their Chesapeake Bay goals and VSDA has supported nutrient management plans as a way to promote good environmental stewardship,” he wrote. The DMC program has shown itself to be a vast improvement over previous programs and the increased volatility the industry has experienced have proven its worth.”
Paulson pointed to one issue that has remained. This is farmers being hesitant to sign up when prices are positive.
“This was the case in 2020 when every outlook forecasted high milk prices, but we all know what happened next,” he said.
Only 50 percent of dairy farmers signed up for coverage in 2020. Then COVID-19 struck.
“For 2021 that number has jumped to 68 percent of dairies nationwide,” Paulson said. “For a farm covering five million pounds of milk in DMC, the 2020 program totaled more than $36,000 or 73 cents/cwt. Already in 2021, the DMC program has made payments for the first two months as feed prices have risen and milk prices haven’t kept pace.”
He added that under the old margin protection program many dairy farmers who signed up for coverage found that the program never worked and became distrustful of such programs.
“This new program aims to solve that dilemma by making that first five million pounds of coverage risk free, in exchange for a nutrient management plan,” he said.
Paulson said those who already have a NMP and participate in the DMC program will only have to sign up for 2022 coverage and fill out a form to be provided by VDACS later this year.
“If you don’t have a NMP and are interested in participating, you should reach out to your local soil an water office, DCR, NRCS or extension office about having a plan created for your operation,” he advised.