Press release: USDA says MILC payments on way to dairy farmers

ALBUQUERQUE – Brenda Archuleta, Acting Executive Director of USDA’s Farm Service Agency in New Mexico announced today that because of low dairy prices across the country, producers participating in USDA’s Milk Income Loss Contract (MILC) program will soon begin to receive payments.

“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,” said Archuleta.

USDA 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 monthly Boston price along with final MILC payment rates are posted online at: http://www.fsa.usda.gov/FSA.

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 cwt. USDA’s National Agricultural Statistics Service released the data for determining the Average Dairy Feed Ration Cost for the month of February on March 30, 2009. Using this information and the formula contained in the 2008 Act, the MILC payment trigger for the month of February has been adjusted to $17.33, for a final MILC payment rate of $1.5132. Beginning today, USDA expects to issue approximately $150 million to dairy producers for milk produced in February.

USDA’s Agricultural Marketing Service announced the Boston Class I price for the month of March on Feb. 20, 2009 and for the month of April on March 20, 2009. In both instances, the Boston Class I price was below the MILC payment trigger price of $16.94 per cwt. USDA 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. MILC payments may also be triggered in future months if the MILC payment trigger price is below $16.94 per cwt.

FSA makes payments up to the maximum eligible pounds of milk produced and marketed by each operation per fiscal year. The annual maximum eligible pound limit per dairy operation is 2,985,000 pounds per fiscal year.

For more information about the MILC program, please visit your FSA county office or http://www.fsa.usda.gov.

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