Our team just conducted a short survey to gather information about dairy farmer preferences and educational needs related to the new Dairy Margin Coverage program. Many thanks to the 30 farms that completed our survey!
The Dairy Margin Coverage (DMC) program is a new tool that dairy producers can use to manage price risk. DMC is a redesigned version of the Farm Service Agency’s old Margin Protection Program (MPP). Sign-ups for the new DMC program began on Monday June 17, 2019. We completed this survey prior to the start of the sign-up period to assess farmers’ enrollment intentions, and their preferences for educational resources and programs.
To administer this online survey, we emailed an anonymous link directly to 161 dairy farmers who operate within our 6-county region (Broome, Chemung, Cortland, Onondaga, Tioga, and Tompkins). We also posted an invitation to complete the survey on our team blog, which goes out by email to more than 500 subscribers. Finally, we shared the survey twice on our South Central NY Dairy & Field Crops Team Facebook page, where the two Facebook posts garnered over 400 views.
It is important to note that we used a “convenience sampling” method to distribute the survey online and recruit as many participants as possible given limited time and resources. As a result, there is no reason to believe that the survey results are statistically representative of all dairy farms in our region. Farms without email addresses or with poor internet access are likely to be underrepresented in our sample. Nevertheless, their answers do give us insight into what a small group of farmers from our region is thinking about the Dairy Margin Coverage program.
Each survey response represents one New York State dairy farm, with a total of 30 farms completing the survey. Figure 1 shows the breakdown of respondents by county, with 28 of 29 respondents located in our 6-county South Central NY region (one respondent did not report their county). The 28 farms known to be within our region represent 8% of all dairy farms, based on 2017 census data that estimates 355 dairy farms in our South Central NY Region.
Our sample captured a fairly broad range of farms, in terms of both size and productivity (Figure 2). Our sample included farms currently milking between 33 and 2,000 cows. The majority of farms in our sample (83%) milked 180 cows or less, while the remaining 17% of farms milked 660 cows or more. Productivity ranged from a minimum of 40 to a maximum of 91 pounds of milk per cow per day. Productivity values reported by the larger farms were very consistent, while productivity values for the smaller farms varied widely.
Most of the respondents had some direct experience with the previous Margin Protection Program. As Figure 3 illustrates, 87% of respondents indicated that their farm had enrolled in MPP at some point. Only four farms (13%) had never participated in the MPP program in any of the previous rounds.
Most farmers showed favorable intentions toward the new Dairy Margin Coverage program. Fully 94% said they were extremely likely or somewhat likely to sign up (Figure 4). Only one farm (3%) was ambivalent about signing up. Three of the four farms that never participated in MPP stated that they were likely to sign up for DMC, suggesting that lack of experience with MPP will not prevent farms from taking advantage of DMC. However, the one farm that reported being extremely unlikely to enroll in DMC also reported never participating in MPP.
As expected, farmer attitudes toward signing up for 5 years of coverage in 2019 were more divided. USDA is offering a 25% discount on the cost to enroll in DMC for farms that choose to sign up in 2019 for a full 5-year period. This discount is a new feature for DMC that was not part of the original MPP. Only half of our respondents reporting being likely to take advantage of this deal, while 27% were ambivalent and 23% were unlikely to pursue it (Figure 5). We suspect that farmers who are on the fence about the discounted 5-year signup option may need more information to evaluate the merits of this new feature.
A majority of our survey respondents (87%) are likely to seek out more information about the Dairy Margin Coverage program during the enrollment period (Figure 6), which goes from mid-June to mid-September. This suggests that many farms have not made up their minds about the program, and that their enrollment decisions could still be influenced by educational programs and resources.
The survey included a question that provided a list of educational resources, and asked farmers to select any that would help them to make an enrollment decision. Answers to this question are summarized in Figure 7. The two most popular options, selected by 43% of respondents, were resources that farmers could access online, allowing them to absorb the information at home and on their own schedules. One third of respondents indicated that an in-person workshop with other farmers would be helpful, while 30% responded in favor of the online decision making tool and an in-person meeting with a CCE educator.
Fortunately, several of the educational resources favored by survey respondents already exist. Written materials are available directly from the Farm Service Agency website, and we recently featured an article on our blog titled What You Should Know About Dairy Margin Coverage. This article also appears in the May edition of our Dairy Digest print newsletter, which is available at any of the six county CCE offices throughout our region.
The USDA offers an online decision tool to help farmers evaluate their DMC premium (cost) and payout (benefit) under different potential scenarios. Producers are welcome to make an appointment with one of our team members if you would like to sit down together and work through the decision tool using numbers from your farm. This tool should be especially helpful for farmers who are undecided about whether to enroll in DMC for a single year or take advantage of the discounted 5-year enrollment option. If you enter your farm’s established production history, the decision tool will help you compare your cost to enroll for 2019 versus your total discounted cost to enroll for the 5-year period from 2019 – 2023.
For producers interested in watching a video about the program, you are in luck! The Farm Service Agency recently partnered with the New York Crop Insurance Education Program to produce a Dairy Risk Management webinar about the Dairy Margin Coverage program, as well as other USDA Risk Management Agency insurance programs for dairy farms. You can press play to watch the video, below!
If you would like to talk with an educator about your own situation and your farm’s enrollment decision, we would be happy to help! We encourage producers to contact any of our team members by phone or email, or contact your local CCE office, to schedule a meeting. We would be happy to talk through the various features of the program, and run through scenarios using the decision tool, to help you make the best possible enrollment decision for your farm.