DPMPPDynamic Programming for Mpp
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Among other changes, it proposed replacing MILC with a new margin insurance program called the Dairy Producer Margin Protection Program (DPMPP).
The DSA includes a DPMPP margin insurance program similar to the 2012 proposal to replace MILC, but with slightly different premium rates for buy-up coverage.
DFA also proposes slightly different producer premiums and coverage options in its DPMPP margin insurance program than DSA, and no free DPMPP option for operations that produce more than 4 million pounds of milk annually.
the proposed DPMPP programs have perhaps received less attention recently.
The new DPMPP proposals, on the other hand, have no such production caps on payments.
Figure 3 presents expected annual payments for a 1,000-cow dairy for DPMPP under the DSA proposal for all available buy-up coverage levels net of premium paid, as well as for MILC.
The divergence between large- and small-producer results is due to the production caps under MILC being lifted under DPMPP. Not taking into account production caps, expected payments per cwt are much lower under DPMPP than under MILC, and MILC will also pay out more frequently.
Note that under the DPMPP proposals in the DSA and DFA, a premium is required for buy-up coverage.