Transition Period for LGM-Dairy to DMM is Announced by FSA
The 2014 farm bill now provides for a new Dairy Margin Management (DMM) program. Dairy farmers have been able to take advantage of Livestock Gross Margin-Dairy (LGM-Dairy) under current crop insurance provisions. However, the 2014 bill provides that a dairy farmer cannot take advantage of both programs to prevent “double-dipping”. In addition, the LGM-Dairy insurance program can extend into 2015 after the DMM is scheduled to start in September, 2014. This presented concerns regarding dairy farmers wanting to sign-up for DMM but being prevented since they were already enrolled in LGM-Dairy.
To address these concerns, the FSA just released Notice LD-637 providing a transition period for these farmers. Essentially, the transition allows the dairy farmer to sign up for DMM, but not start the program until their contract under LGM-Dairy expires. Since the DMM payments cover a two-month period at a time, there is a chance a dairy farmer would have no coverage for a full month.
For example, if a dairy farmer has a LGM-Diary contract through February 28, 2015, their DMM coverage would start March 1, 1015. However, if their LGM-Diary contract expired March 31, 2015, their DMM coverage would not start until May 1, 2015.
Paul Neiffer, CPA
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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