WASHINGTON — The USDA is starting to implement the new Dairy Economic Loss Assistance Payment (DELAP) program, which offers a one-time payment to help struggling milk producers.
The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.
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.
The expected payment rate is approximately 32 cents per hundredweight.
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 30 days, until Jan. 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.
To be eligible for the new Dairy Economic Loss Assistance Payment, 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;
— Must have milk production data for those months;
— 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.
A national per hundredweight 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.
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.
For more information and eligibility requirements on the new DELAP program, please visit your local FSA county office or www.fsa.usda.gov.