Government offers insurance against an economic disaster farmers are already experiencing
SIOUX FALLS, South Dakota — The U.S. Department of Agriculture has opened enrollment for next year’s Dairy Margin Coverage program, giving producers until December 18 to sign up for a safety net against low margins, a hazard several said they’d already tested in person.
Dairy Margin Coverage Enrollment Open Through December 18
Dairy Margin Coverage pays producers when the gap between the national milk price and a formula-based feed cost falls below a chosen coverage level. Enrollment details, coverage options and premium information are posted on the Farm Service Agency Dairy Margin Coverage page, and general program guidance is available at Farmers.gov. Producers can enroll at their local Farm Service Agency office.
Agency officials encouraged all eligible dairy operations to review their options and sign up before the deadline. They described the program as a valuable risk management tool. Producers agreed it was valuable. Several said they’d have liked to use it earlier, preferably before the risk arrived.
Why Dairy Producers Are Skeptical of Future Coverage
The safety net is designed to look forward. Producers choose a coverage level, pay a premium and hope the margin stays above the trigger. When it doesn’t, payments arrive. The system works as intended.
A Producer’s Question at the Counter
“I’m happy to sign up for next year,” said Wanda Rietveld, who milks 260 cows near Brookings. “I just want to make sure I understand the product. Does it also protect me from this year? Because this year’s the one that’s hurting.”
Rietveld said she’d asked at the county office and gotten a friendly, accurate answer, which was that the program covers the coverage year and not the one before it. She said she’d thanked the clerk, then sat in the truck for a while.
Transcript: A Call to the County FSA Office
A producer in the area recorded a call to the local Farm Service Agency office, with the staffer’s knowledge, and shared a portion. It reads in part:
Producer: I’d like to enroll in the margin coverage for next year.
Staffer: Great, we can do that.
Producer: Does it cover what’s happening now?
Staffer: It covers next year.
Producer: What if I’d like to be covered for this year, retroactively, for the part I already lost?
Staffer: That would be a time machine.
Producer: Do you have one?
Staffer: We have a form.
The staffer, reached afterward, said the exchange was friendly and that the office would be happy to help the producer with the form.
Group Chat: “Did Anyone Sign Up Yet?”
Texts shared from a group chat among South Dakota dairy producers show the mood around the enrollment window. In one exchange, a producer asks whether anyone has signed up yet. Another replies that he’s going tomorrow. A third says he went last week and the office was packed. A fourth writes, “Anyone know if there’s coverage for last year?” A fifth responds with a single laughing emoji, and the thread goes quiet for several hours, which in a group chat of dairy farmers means everyone’s milking.
USDA Spokesperson: “A Valuable Tool”
A USDA spokesperson said the department wants every eligible producer to understand their options and take advantage of the program.
“Dairy Margin Coverage is a valuable tool,” the spokesperson said. “We encourage producers to enroll early and to talk with their local office about the coverage level that fits their operation. Producers who have questions about prior-year payments should contact their county office as well.”
Asked whether prior-year coverage was available, the spokesperson said the program is designed to be forward-looking, and that the department would be happy to connect producers with resources on the current year, which she said was a separate matter.
Extension Guidance on Choosing Coverage
Land-grant extension programs, including the Iowa State University Extension dairy resources, offer decision tools and worksheets to help producers choose coverage levels. Most recommend running the numbers for your own herd, comparing premiums to likely payouts and signing up before the deadline.
Producers said they’d done the math. One said the math was the easy part. The hard part was the feeling, in late November, of signing up for next year when this year isn’t over.
The Question Rietveld Left With
Rietveld signed up. She filled out the form, paid the premium and thanked the clerk. On the way out, she said, she asked one more question: could she insure her farm for what it was worth before she started farming?
The clerk said she’d check. As of press time, the clerk was still checking.
Five Humorous Observations on Farm Insurance
- Insurance for next year. Great. I love insurance. It’s the only product you buy so that nothing happens, and then you’re annoyed when nothing happens, because you paid.
- “That would be a time machine.” Buddy, if I had a time machine, I wouldn’t be at the FSA office. I’d be in 1998 buying cows when they were cheap.
- “We have a form.” That’s the most government sentence of all time. You ask for a miracle, and they hand you a clipboard.
- The group chat says one thing, and the laughing emoji says everything. That emoji has a Ph.D. in dairy economics.
- I asked if I could insure my farm for what it was worth before I started farming. She said she’d check. That was Monday. I’m trying not to read into it.
“That would be a time machine.” “We have a form.” Lord, that is the most honest conversation anybody’s ever had at an FSA counter. My husband signed up for crop insurance the morning after the hail, and they gave him the same look. Next year I’m enrolling the cows themselves, since they’re the only ones on this place who can see trouble coming.