Vermont Public is independent, community-supported media, serving Vermont with trusted, relevant and essential information. We share stories that bring people together, from every corner of our region. New to Vermont Public? Start here.

© 2024 Vermont Public | 365 Troy Ave. Colchester, VT 05446

Public Files:
WVTI · WOXM · WVBA · WVNK · WVTQ · WVTX
WVPR · WRVT · WOXR · WNCH · WVPA
WVPS · WVXR · WETK · WVTB · WVER
WVER-FM · WVLR-FM · WBTN-FM

For assistance accessing our public files, please contact hello@vermontpublic.org or call 802-655-9451.
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Dairy Farmers Encouraged To Enroll In New Milk Insurance Program

Steve Zind
/
VPR
Buying margin protection insurance will require some careful calculations by dairy farmers.

Beginning this week, Vermont dairy farmers can sign up for a new insurance program put in place under the 2014 Farm Bill.

The Dairy Farm Risk Management Program is the latest effort to protect farmers from fluctuations in milk and feed prices. 

On Thursday, Vermont dairy representatives joined Sen. Patrick Leahy and Rep. Peter Welch at an East Montpelier Farm to announce a series of five informational meetings next month to explain the program to farmers.

Unlike earlier price support systems, the new program allows farmers to buy different levels of insurance coverage tied to the margin between feed costs and milk costs. When the margin falls below a certain level for two consecutive months, the farmer receives a margin protection payment.

Jenny Nelson, a dairy farmer and policy advisor to Sen. Bernie Sanders, says the program offers farmers flexibility they didn’t have with earlier price supports.

“We have our own efficiencies and economies of scale as a 200-cow farm, but there are many who have larger farms and many with smaller farms here in Vermont and every farmer can custom fit this insurance program to meet their needs,” says Nelson.

Nelson says farmers will have to determine at what margin the coverage will kick in, and also what percentage of their milk production they want to insure.

Calculating the cost of the insurance also involves establishing a production history based on the amount of milk produced over a period of several years. Coverage costs are as low as $100 annually, but increase based on the margin a dairy farmer chooses as a threshold, the amount of milk produced and the percentage of milk production to be insured. For example, maximum coverage for a 300-head herd might cost $45-$50,000.

Mark Rodgers has a dairy farm in West Glover and serves on the board of directors of the Agri-Mark Family Dairy Farms cooperative.

Rodgers says he’ll sign up to protect himself from years like 2005 and 2009, when he lost $250,000 annually.

“There’s a limit to how much equity you can suck out of operation,” he says. “2005 and 2009 really tried to put me out of business. This will protect me from those catastrophic-type losses.”

Rodgers says he’ll pay about $20,000 annually for the top-level of insurance under the new program, but he says it’s a small price to pay to protect his livelihood.

Vermont Secretary of Agriculture Chuck Ross says the program is critical to the viability of the state’s dairy farms.

“When our Vermont farmers are more viable, they can do their job better. They can make investments in their farms to address challenges like water quality,” says Ross.

Clark Hinsdale, president of the Vermont Farm Bureau, says he’s urging his dairy members to attend one of the information meetings and consult financial and tax advisors about the level of coverage they should buy.

“Everyone needs to look at what they have for credit and what they have for reserves and make a decision,” says Hinsdale.

Milk prices are currently high, and feed prices are reasonable. Hinsdale says the current price margin is very manageable. But the milk market is cyclical and Hinsdale expects there will be times in the future when the margin will fall below profitable levels again.

In the future, Hinsdale expects banks and other institutions may base lending decisions on how much protection a farm has purchased.

The deadline for farmers to sign up for the program is  November 28. The hearings will be held:

Monday, Oct. 13, American Legion Hall, St. Albans. Tuesday, Oct.14, American Legion Hall, Middlebury. Wednesday, Oct. 15, Holiday Inn, Rutland. Thursday, Oct. 16, Fairfield Inn, White River Jct. Friday, Oct. 17, East Side Restaurant, Newport.

Steve has been with VPR since 1994, first serving as host of VPR’s public affairs program and then as a reporter, based in Central Vermont. Many VPR listeners recognize Steve for his special reports from Iran, providing a glimpse of this country that is usually hidden from the rest of the world. Prior to working with VPR, Steve served as program director for WNCS for 17 years, and also worked as news director for WCVR in Randolph. A graduate of Northern Arizona University, Steve also worked for stations in Phoenix and Tucson before moving to Vermont in 1972. Steve has been honored multiple times with national and regional Edward R. Murrow Awards for his VPR reporting, including a 2011 win for best documentary for his report, Afghanistan's Other War.
Latest Stories