Payments for dairy farmers coming before year's end
Heather Thorstensen
Date Modified: 01/04/2010 3:35 PM
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Agri News staff writer
WASHINGTON -- Dairy farmers will be getting somewhat of a Christmas gift this year from USDA.
Agriculture Secretary Tom Vilsack announced Dec. 17 his department has a new program to divide the $290 million available for payments to dairy farmers in the 2010 Agriculture Appropriations Bill. It's called the Dairy Economic Loss Assistance Payment Program.
"I have personally heard from hundreds of struggling dairy farmers from all across the country who have been hit hard by declining prices over the past year, and now, we'll be able to offer them help," said Vilsack.
Payments will be administered through the Farm Service Agency. A fact sheet distributed to FSA offices says most dairy farmers should see the one-time, direct payment transferred to their bank accounts beginning Dec. 24.
Kevin Beekman, program specialist for the Farm Service Agency in Minnesota, said it's more safe to say the payments will come before the end of the year.
Payments will be based on how much milk a dairy operation produced and sold between February 2009 and July 2009.
USDA will extrapolate these six months to a full year by doubling milk production. Payments are capped at 6 million pounds for the year.
It's estimated the payment rate will be around 32 cents per hundredweight.
Producers can get a sense of what their payment will be by multiplying their milk production -- in hundredweight -- by two. Then, multiply the product by 32 cents.
The maximum payment possible through this program is estimated to be $19,200, due to the production cap.
USDA said the vast majority of producers, 95 percent, won't need to apply for payments because their production records are already at Farm Service Agency offices for other dairy programs, like the Milk Income Loss Contract program.
Those that haven't signed up for MILC need to apply and might not get payments until late February or mid-March, 2010. The sign-up period began Dec. 17 and ends Jan. 19, 2010. They should contact their county FSA office to begin the process.
Beekman said it would take roughly a 300-cow dairy operation to hit DELAP's 6 million pound production cap. He said quite a few Minnesota dairy farms hit the MILC production limit, which is approximately 3 million pounds, and about the same is expected of the expanded limit.
That's not so much an issue in Iowa, according to Jim Book, program specialist with FSA in that state.
"There will be some, but not a lot," he said.