Indicators of Dairy Farm Financial Condition as Policy Triggers

Christopher A. Wolf, Andrew M Novakovic, Mark W. Stephenson and Wayne A. Knoblauch

Journal of Agribusiness, 2014, vol. 32, issue 2

Abstract: The 2014 Farm Bill repealed long-standing dairy farm safety net programs and introduced the Margin Protection Program for Dairy Producers (MPP). This program uses a national measure of milk income over feed cost (IOFC) as the trigger for farm payments. This paper considers the MPP IOFC and other potential triggers compared to actual dairy farm financial performance. We find that the MPP IOFC has been highly correlated with profitability on dairy farms in recent years while the milk-to-feed price ratio has not. Issues that remain in using IOFC as a dairy policy trigger include regional differences, herd size, and technological change.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jloagb:311254

DOI: 10.22004/ag.econ.311254

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