In another effort to help struggling dairy producers, the U.S. Department of Agriculture recently announced the implementation of the Dairy Economic Loss Assistance Payment program.
Authorized by the 2010 Agricultural Appropriations Bill, $290 million will be paid out to eligible producers across the country to help stabilize their operations that have taken substantial financial hits over the past year as milk prices have continued to decline.
In fourth quarter 2008, the national price for milk was averaging $16.80 per hundredweight, but by the end of first quarter 2009 the price had dropped to $12.23 cwt a decline of 27 percent. On average, the price received for milk marketed in the summer of 2009 was about half of what is costs U.S. dairy producers to produce, according to figures released by the USDA.
Eligible producers meaning those with an annual average adjusted gross nonfarm income of less than $500,000 will receive a one-time direct payment based on the amount of milk produced and commercially marketed by their operation from February 2009 to July 2009.
Dairy producers who participated in one of the other USDA Farm Service Agency programs do not need to apply for the DELAP program as FSA will use existing production records to calculate and issue payments.
Producers who have not participated in one of the FSA dairy programs have until Jan. 19 to apply, but producers must be able to share the following information: milk production data for the months of February 2009 through July 2009 and must be able to certify that all milk produced and marketed by the dairy operation during that time. FSA officials estimate that more than 95 percent of eligible producers will receive benefits without having to fill out a new application.
Based on current information, FSA estimates that 875 million cwt of milk production will be eligible for payment, which is expected to be approximately $0.32 per cwt.
Also part of the 2010 Agricultural Appropriations Bill, the USDA announced Monday its intent to purchase approximately $60 million in cheese and cheese products for use in domestic feeding programs through the agency's Food and Nutrition Services. This aid comes at a time when the nation's food banks are experiencing all-time high demand.
"This purchase will provide food to people in need, while helping dairy producers who are facing economic challenges by increasing demand for dairy products," said Secretary Tom Vilsack.