Federal aid heads to dairy farms

DAVIS
April 6, 2009 12:02am

Because of low dairy prices across the country, producers participating in the federal Milk Income Loss Contract (MILC) program will soon begin to receive payments, says David Schaad, acting executive director of USDA’s Farm Service Agency in California.

"As a result of low dairy prices, we will soon begin distributing MILC payments to ensure that dairy producers have the financial assistance they need. This action will also stimulate local economies," says Mr. Schaad.

The U.S. Department of Agriculture makes MILC payments on a monthly basis when the “Boston Class I” milk price falls below $16.94 per hundredweight as adjusted for feed costs. USDA determines the per hundredweight payment rate for the applicable month by subtracting the Boston Class I price for that month from the $16.94 MILC payment trigger price, established in the 2008 Farm Bill, as adjusted for feed costs, and multiplying the difference by 45 percent.

The MILC payment trigger price of $16.94 is adjusted upward when the “National Average Dairy Feed Ration Cost” for a month is greater than $7.35 per hundredweight.

USDA expects to issue approximately $150 million to dairy producers for milk produced in February under the program.

It says it expects to issue MILC payments on milk produced in March in early May and MILC payments on milk produced in April in early June, after USDA has adjusted the MILC payment trigger price for feed costs and determined the final payment rate for those months.