US Department of Agriculture (USDA) secretary Tom Vilsack confirmed this week that more than 23,000 of America’s dairy operations – over half of all dairy farms in America – have enrolled in the new safety-net programme created by the 2014 Farm Bill, known as the Margin Protection Programme.

The voluntary 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.

For Irish and European producers, the MPP is a negative development in that it is likely to insulate American farmers from the worst excesses of the market, leading to higher output than would be the case if they were fully exposed to price volatility.

The Margin Protection Programme offers dairy producers a range of choices of protection that are best suited for their operation. It starts with basic coverage for an administrative fee of $100, but producers can select higher levels of coverage at affordable incremental premiums.

US milk production was up 3.4% in November. The latest USDA forecast is for 2.9% growth in 2015 output. Thankfully, the stronger dollar is giving European exporters an advantage over American product on global markets.