Milk Volume Production (MVP) Program

Dairy producers who plan to increase milk production by expanding their dairy herds may obtain equity gap financing through the Milk Volume Production (MVP) program.

This program was created to support Wisconsin's dairy industry by easing the financial burden on dairy farmers who want to modernize and increase their herd size.

Eligibility

All dairy producers that are, or will be located in Wisconsin and are planning capital investments that will result in significant long-term increases in Wisconsin's capacity to produce milk are invited to apply.  Main requirements are creating jobs, adding cows, investing in buildings and equipment and meeting the equity gap financing requirements of 45% or less post close on the project.

Level of Participation

Commerce may approve MVP funding of up to $500 for each cow added to the operation. The maximum award available is based on the demand on Commerce's resources. The amount of Commerce's participation, if any, is dependent upon a comprehensive evaluation of the project. The loan award level is between 40 to 400 cows or $20,000 to $200,000 and subject to variation depending on the demand for Commerce resources.

Eligible Project Costs

Eligible project costs are limited to the cost of acquiring cows.

Finance Terms and Conditions

MVP loans have a term of seven (7) years with a fixed interest rate of 4% for the life of the loan. Repayment is deferred for the first year, followed by interest only payments in the second year. Principal and interest payments will be made during years three (3) through seven (7). 

Collateral

The Department will provide near-equity financing supported by a Farm Security Agreement that is subordinate to the project's primary lender. Personal guarantees will also be required.

Underwriting Criteria

The MVP application process is competitive.  Funding is not available to applicants who do not have a comprehensive business plan and who cannot show that their project will have a long-term, sustainable impact on Wisconsin's milk production.

In evaluating MVP applications, Commerce will consider factors that include the applicant's managment skills in the following areas:

1. Financial management skills: cost of production, debt per cow, return on assets, etc.
2. Production management skills: milk production per cow, average somatic cell count, herd turnover rate, herd mortality rate, etc.
3. Labor management skills.
4. Environmental management skills.  Previous experience implementing a nutrient management plan or managing waste storage and handling facilities is beneficial.
5. Ability to secure private sector financing needed to assure success of the project.

Application Process

The MVP program is a collaboration between the applicant, Commerce, and the local municipality (typically the county).  This program is unique in that loan repayments made by the applicant will go directly to the local municipality to help establish or expand a revolving loan fund (RLF).

The MVP application process is as follows:

1. Interested applicants must contact the Executive Director of the Dairy 2020 Initiative, who will discuss the project, provide a copy of the application as well as identify other programs that may be of assistance. 
    
2. The applicant will complete and submit the Prospect Data Sheet to Commerce, along with a business plan that fully describes and evaluates the proposed project.  If the applicant does not have a business plan, the Dairy 2020 Early Planning Grant program may be able to provide funding to develop one.
   
3. Commerce's finance specialists will underwrite the project and make a funding recommendation to the Secretary's Office, which will either:

1. Deny the proposal, in which case the applicant will receive a letter outlining the reasons for denial,

or

2. Make a positive funding decision, in which case the applicant will receive a preliminary committment letter fully detailing the terms and conditions of Commerce's participation.

For more information on this program, or to obtain application materials, you can also contact Irv Possin, Executive Director, Dairy 2020 Initiative.