WASHINGTON – The agriculture appropriations bill just signed by President Clinton provides an estimated $667 million to help dairy farmers cope with the low milk prices, which have declined for three consecutive years, and are now at their lowest level since 1991.
About 80,000 dairy farmers across the country will receive an average of $8,300 each, according to Agriculture Secretary Dan Glickman.
The maximum payment per farmer will be capped at $25,000.
Overall, USDA expects to distribute more than twice as much dairy market loss assistance this year as it has in the last two years combined.
Estimates indicate that Wisconsin dairy farmers will receive about $137 million. New York farmers will receive an estimated $60 million; Minnesota is expected to receive about $56 million and the USDA will distribute an estimated $51 million in California and $48.5 million in Pennsylvania.
In addition, Glickman announced a major expansion of USDA’s Dairy Options Pilot Program.
This cost-share program helps dairy farmers put a “floor” under the price they receive for milk using the futures and options markets. USDA subsidizes both premiums and brokerage fees for participating dairy farmers.
USDA will spend about $24 million over the next two years expanding this program, which allows dairy farmers to leverage significantly more protection against price drops.
The program, currently operating in 61 counties, will expand to 300 counties in 39 states.
The market loss assistance payments will be made to dairy farmers who received payments in the last two years as well as new producers.
In an effort to speed payments and eliminate the need for a sign-up, payments to previous participants will be automatically calculated based on 1997 or 1998 production levels, whichever are higher.
In order to better target small to medium-sized producers, payment calculations for all participants will be limited to the first 39,000 cwt. of production. All dairy farmers will receive the same payment rate. Further details are expected to be announced next month. Payments are expected to go out within the next few months.
A full list of new DOPP participating counties is available on the Web at http://www.usda.gov/news/releases/2000/10/0372a.pdf.