SEC. 2. DAIRY PRODUCER MARGIN INSURANCE PROGRAM. 
Subtitle E of title I of the Food, Conservation, and 
Energy Act of 2008 (7 U.S.C. 8771 et seq.) is amended 
by adding at the end the following new section: 
‘‘SEC. 1511. DAIRY PRODUCER MARGIN INSURANCE PRO-
GRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ACTUAL DAIRY PRODUCER MARGIN.—The 
term ‘actual dairy producer margin’ means the dif-
ference between the all-milk price and the average 
feed cost, as calculated under subsection (b)(2). 
‘‘(2) ALL-MILK
PRICE.—The term ‘all-milk 
price’ means the average price received, per hun-
dredweight of milk, by dairy producers for all milk 
sold to plants and dealers in the United States, as 
reported by the National Agricultural Statistics 
Service. 
‘‘(3) AVERAGE FEED COST.—The term ‘average 
feed cost’ means the average cost of feed used by a 
dairy operation to produce a hundredweight of milk, 
determined under subsection (b)(1) using the sum of 
the following: 
‘‘(A) The product determined by multi-
plying— 
‘‘(i) 1.0728; by 
‘‘(ii) the price of corn per bushel. 
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‘‘(B) The product determined by multi-
plying— 
‘‘(i) 0.00735; by 
‘‘(ii) the price of soybean meal per 
ton. 
‘‘(C) The product determined by multi-
plying— 
‘‘(i) 0.0137; by 
‘‘(ii) the price of alfalfa hay per ton. 
‘‘(4) CONSECUTIVE
2-MONTH
PERIOD.—The 
term ‘consecutive 2-month period’ refers to the 2- 
month period consisting of the months of January 
and February, March and April, May and June, 
July and August, September and October, or No-
vember and December, respectively. 
‘‘(5) DAIRY PRODUCER.—The term ‘dairy pro-
ducer’ means an individual or entity that directly or 
indirectly (as determined by the Secretary)— 
‘‘(A) shares in the risk of producing milk; 
and 
‘‘(B) makes contributions (including land, 
labor, management, equipment, or capital) to 
the dairy operation of the individual or entity 
that are at least commensurate with the share 
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of the individual or entity of the proceeds of the 
operation. 
‘‘(6) MARGIN INSURANCE PROGRAM.—The term 
‘margin insurance program’ means the dairy pro-
ducer margin insurance program required by this 
section. 
‘‘(7) PARTICIPATING
DAIRY
PRODUCER.—The 
term ‘participating dairy producer’ means a dairy 
producer that registers under subsection (d)(2) to 
participate in the margin insurance program. 
‘‘(8) PRODUCTION
HISTORY.—The term ‘pro-
duction history’ means the quantity of annual milk 
marketings determined for a dairy producer under 
subsection (e)(1). 
‘‘(9) UNITED
STATES.—The term ‘United 
States’, in a geographical sense, means the 50 
States. 
‘‘(b) CALCULATION OF AVERAGE FEED COST AND 
ACTUAL DAIRY PRODUCER MARGINS.— 
‘‘(1) CALCULATION OF AVERAGE FEED COST.— 
The Secretary shall calculate the national average 
feed cost for each month using the following data: 
‘‘(A) The price of corn for a month shall 
be the price received during that month by agri-
cultural producers in the United States for 
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corn, as reported in the monthly Agriculture 
Prices report by the Secretary. 
‘‘(B) The price of soybean meal for a 
month shall be the central Illinois price for soy-
bean meal, as reported in the Market News— 
Monthly Soybean Meal Price Report by the Sec-
retary. 
‘‘(C) The price of alfalfa hay for a month 
shall be the price received during that month by 
agricultural producers in the United States for 
alfalfa hay, as reported in the monthly Agri-
culture Prices report by the Secretary. 
‘‘(2) CALCULATION
OF
ACTUAL
DAIRY
PRO-
DUCER MARGINS.—The Secretary shall calculate the 
actual dairy producer margin for each consecutive 2- 
month period by subtracting— 
‘‘(A) the average feed cost for that con-
secutive 2-month period, determined in accord-
ance with paragraph (1); from 
‘‘(B) the all-milk price for that consecutive 
2-month period. 
‘‘(c) ESTABLISHMENT OF DAIRY PRODUCER MARGIN 
INSURANCE PROGRAM.—The Secretary shall establish and 
administer a dairy producer margin insurance program for 
the purpose of protecting dairy producer income by paying 
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participating dairy producers margin insurance payments 
when actual dairy producer margins are less than the 
threshold levels for the payments. 
‘‘(d) ELIGIBILITY
AND REGISTRATION
OF DAIRY 
PRODUCERS FOR MARGIN INSURANCE PROGRAM.— 
‘‘(1) ELIGIBILITY.—All dairy producers in the 
United States shall be eligible to participate in the 
margin insurance program. 
‘‘(2) REGISTRATION PROCESS.— 
‘‘(A) REGISTRATION.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall register all interested dairy producers 
in the margin insurance program. 
‘‘(ii) MANNER AND FORM.—The Sec-
retary shall specify the manner and form 
by which a dairy producer shall register for 
the margin insurance program. 
‘‘(B) TREATMENT
OF
MULTI-PRODUCER 
OPERATIONS.—If a dairy operation consists of 
more than 1 dairy producer, all of the dairy 
producers of the operation shall be treated as a 
single dairy producer for purposes of— 
‘‘(i) purchasing margin insurance; and 
‘‘(ii) payment of producer premiums 
under subsection (f)(4). 
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‘‘(C) TREATMENT
OF
PRODUCERS
WITH 
MULTIPLE DAIRY OPERATIONS.—If a dairy pro-
ducer operates 2 or more dairy operations, each 
dairy operation of the producer shall require a 
separate registration to participate and pur-
chase margin insurance. 
‘‘(3) TIME FOR REGISTRATION.— 
‘‘(A) EXISTING DAIRY PRODUCERS.—Dur-
ing the 1-year period beginning on the date of 
enactment of this section, a dairy producer that 
is actively engaged in a dairy operation as of 
that date may register with the Secretary to 
participate in the margin insurance program. 
‘‘(B) NEW ENTRANTS.—A dairy producer 
that has no existing interest in a dairy oper-
ation as of the date of enactment of this sec-
tion, but that, after that date, establishes a new 
dairy operation, may register with the Secretary 
during the 180-day period beginning on the 
date on which the dairy operation first markets 
milk commercially to participate in the margin 
insurance program. 
‘‘(4) RETROACTIVITY.— 
‘‘(A) NOTICE OF AVAILABILITY OF RETRO-
ACTIVE PROTECTION.—Not later than 30 days 
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