Nicholson helps dairy farmers mitigate financial risks

UNIVERSITY PARK, Pa. -- Charles Nicholson, clinical associate professor of supply chain management at the Penn State Smeal College of Business, is contributing to the introduction of the Margin Protection Program for Dairy Producers (MPP), a government-sponsored insurance initiative to help the nation’s dairy farmers mitigate their financial risks.

Development of the MPP is part of the Agricultural Act of 2014, which was passed by Congress and signed into law by President Barack Obama in February. The program provides financial assistance to participating farmers when the margin — the difference between the price of milk and feed costs — falls below the coverage level selected by the farmer.

Nicholson is part of a consortium of land-grant university economists from Cornell, Illinois, Michigan State, Minnesota, Ohio State and Wisconsin that has developed a Web-based tool along with related outreach and education strategies to assist farmers with MPP-related decisions.

"The MPP represents an important opportunity to protect against the low margins that were devastating to many farm businesses in 2009 and 2012,” Nicholson said. “However, the MPP provides many coverage options so participation decisions require careful consideration of the strategy most appropriate for an individual farm business."

As Penn State’s representative on the consortium — the National Program on Dairy Markets and Policy (DMaP) — Nicholson has contributed to the refinement of the Web tool, training of U.S. Department of Agriculture staff and developed related educational materials. He is partnering with Penn State Extension staff and representatives of other organizations in Pennsylvania and across the northeast to improve awareness of MPP and the impacts of alternative participation strategies.

For more on the Margin Protection Program and to access the decision support tool, visit www.fsa.usda.gov/mpptoolwww.dairymarkets.org/mpp or www.farmdoc.illinois.edu/farmbilltoolbox.

Media Contacts: 
Last Updated January 09, 2015