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Schumer Explains That New Dairy Insurance Program Is Significant Improvement from Old MILC Program, But It Requires Individual Farmers to Take Action to Enroll and Decide How Much to Cover and at What Level – Schumer Wants USDA to Assist Dairies Who Need to Make Important Decisions about their Insurance

Schumer Urges USDA to Prioritize $6M Set Aside For Farmer Education on Crop & Insurance Programs for Dairy Farmers and Calls on the USDA to Mobilize Resources at their Local Farm Service Agencies Now, Before New Program Starts in September

Schumer to USDA: Be Ready to Help Dairies Get the Right Insurance for their Needs

Today, at Van Althuis Dairy Farm in Sherburne, U.S. Senator Charles E. Schumer urged the USDA to prioritize Chenango County dairy farmers for farmer education funding, so that dairies can acclimate to a new, vital, insurance program starting no later than September. The recently-passed Farm Bill includes an entirely new dairy support program that is a significant improvement from the expiring Milk Income Loss Contract (MILC) program, but requires farmers to make more individual decisions when enrolling. Specifically, Schumer said that there is $6 million in the Farm Bill that is dedicated for technical assistance and outreach and should be prioritized for dairy farmers.  Schumer urged the USDA to proactively prepare their resources, and use the funds to educate and alert dairy farmers about the new margin insurance program and advise them on the best course of action. Van Althuis Dairy Farm, for example, previously participated in the MILC program and is very likely to participate in the new margin insurance program if they can get the adequate support and resources to do so.

“The dairy industry is absolutely vital to Upstate New York's economy and the new Farm Bill will help small dairy farmers across the state access affordable insurance policies through a new program this year. While the new program will be an improvement over the previous system, the process will require dairies to make important decisions about their insurance, and I want to make sure the USDA is ready to help them every step of the way,” said Schumer.  “That’s why I’m asking them to ready their resources now and prioritize funds in the Farm Bill for technical assistance and outreach for dairy farmers like Van Althuis Dairy, because many of these small farms don’t have the time or resources to fully understand how to best use the new program.”

Schumer continued, “This new insurance program could be a better safety net for these small dairy farmers, but only if they get the know-how from USDA on the best course of action. So we want the feds to get ready long before September – when the new program goes into place – and devote significant online and in-person resources to helping dairies adjust.”

“New York’s dairy farms will have some complicated decisions to make in the near future. Assistance from USDA will be very helpful in deciphering the new margin insurance program and the multiple decisions farmers will have to make in determining their coverage level. New York Farm Bureau greatly appreciates Senator Schumer’s attention on the matter, and we are hopeful that expert technical assistance will be available as our farmers transition to this new safety net,” said Dean Norton, New York Farm Bureau President.

Unlike the outgoing Milk Income Loss Contract (MILC), which expires on September 1st, the new dairy insurance program instituted by the Farm Bill will require a more individualized registration process.  Dairy farmers will have to make decisions on how much of their historical output or base to cover and at what margin level to elect coverage under the new program. These decisions will largely be based on each individual farmer’s business model; as a result, they will vary significantly. While the new program will require some adjustment, it will provide more accurate reimbursements once implemented, said Schumer. Furthermore, small dairy farms under 200 cows like Van Althuis will benefit from much lower premiums.

Schumer explained that Congress included a sizeable pot of funding in the Farm Bill for the USDA to implement new programs, totaling $100 million. Of that funding, $6 million is planned for technical assistance and outreach: $3 million for State Extension Services to work directly with farmers and $3 million for the creation of web-based tools to help farmers understand and take advantage of the new programs.  Schumer argued that dairy farmers will have to contend with an entirely new insurance program, and thus deserve to be prioritized for that technical assistance.

Because New York’s dairy farms are typically small farms, many lack the adequate time or resources to invest in an analysis of the new insurance program.  Schumer said that the funding in the Farm Bill was passed with these types of farms in mind, and that the USDA’s resources should be used to provide the guidance and technical assistance these small dairy farmers need. The USDA will partner with universities to create the web tools and materials farmers will need to learn the new program. It is important that USDA prioritize dairy in these new tools to best educate farmers about the new insurance program. Additionally, USDA will be partnering with State Extension Services to do outreach to farmers, like Chenango Cooperative Extension.  Local Farm Service Agency will be doing outreach as well.

Frank Van Althuis has been operating Van Althuis Dairy since 1997. They milk about 170 cows, with about 200 mature cows on the farm. They produce Class 1 milk which they send to various creameries in NYC. Van Althuis said they would likely participate in the new milk insurance program once they fully understand all the details.

A copy of Senator Schumer’s original letter to USDA Secretary Tom Vilsack appears below:

Dear Secretary Vilsack:

I would like to commend you on your early efforts to begin the implementation of the Agricultural Act of 2014 also known as the 2014 Farm Bill, as it is of great importance to our rural economies and nation's farmers. I would like to bring to your attention the importance of adequately educating our nation's dairy farmers about the new dairy margin protection program that farmers in New York and across the country will be enrolling in the coming year.

As you know, the Farm Bill included $100 million for implementation of commodity support programs. Of that the bill dedicates $3 million to state extension

services for education and another $3 million for online web tools to assist farmers with deciding how to best utilize the new farm commodity support programs. The 2014 Farm bill includes an entirely new dairy support program that requires farmers to make considerably more individual and complex decisions when enrolling than in the previous Milk Income Loss Contract (MILC) program. In light of this, I urge you to dedicate significant resources targeted specifically at dairy farmers during implementation. This should include targeting state extension education, FSA outreach, and building web tools tailored for dairy farmers to assist in making important decisions on how to best utilize the new program. It is important that these resources both address the challenges dairy farmers face when enrolling in the new program and are distributed equably among states.  

Dairy farmers will have to make decisions on how much of their production base to insure and at what margin level to elect coverage under the new program. These decisions will largely be based on each individual farmer's business model. New York's dairy farmers are primarily small family farms with an average herd size of around 120 cows. I encourage USDA to deploy significant resources to assist farmers, as many of New York's small farmers do not have access to extensive financial planning tools and will rely on USDA to provide guidance and technical assistance. It is important that farmers have been given the proper time and resources to fully understand how to best utilize the new dairy margin protection program before USDA discontinues the MILC program, which is set expire Sept. 1st, 2014.

Again, I commend your efforts to implement many of the important provisions and programs in the 2014 Farm Bill and urge you to direct significant resources to assist dairy farmers so that they may best utilize the new dairy margin insurance program.  Thank you for your attention to this important matter.


Charles E. Schumer

U.S. Senator


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