Program helps farmers struggling with dairy losses
Agriculture Secretary Tom Vilsack has announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program.
The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.
Milk prices declined substantially through early- to mid-2009, with the national price for milk averaging $16.80 per hundredweight (cwt) in the fourth quarter of 2008 and averaging $12.23 per cwt in the first quarter of 2009, a 27 percent decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.
Eligible producers will receive a one-time direct payment based on the amount of milk both produced and commercially marketed by their operation during the months of February through July 2009. Production information from these months will be used to estimate a full year's production for an operation to calculate the payments, using a 6-million pound per dairy operation limit.
Dairy producers who have production records at the USDA Farm Service Agency (FSA) county office because they participated in another FSA dairy program do not need to apply for the program. FSA will use existing production records for February through July 2009 to calculate and issue their payments.
Producers who have not provided production data for those months to FSA, and have not already been contacted by FSA to provide such data, have until January 19, 2010, to apply. FSA officials estimate that more than 95 percent of eligible producers will receive benefits without having to fill out a new application.
A national per hundred weight payment rate will be determined by dividing the available funding of $290 million, less a reserve established by FSA, divided by the total pounds of eligible milk production approved for payment. Based on current information, FSA estimates that 875 million cwt of milk production will be eligible for payment. The reserve will cover new applicants and appeals. The expected payment rate is approximately 32 cents per cwt.
To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share must have produced milk in the United States and marketed milk commercially at any time from February through July 2009 and must have milk production data for those months. Further, they must certify to all milk production produced and marketed by the dairy operation during that time.
Also, any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP.
Dairy producers with questions regarding eligibility or application processing should contact their local county FSA office. In Douglas County, that telephone number is (320) 763-3191, extension 2.