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USDA approves dairy program

Wednesday, December 23, 2009

INDIANAPOLIS -- USDA Farm Service Agency in Indiana Executive Director Julia Wickard announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program.

The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.

"The dairy industry has been impacted significantly during these tough economic times," Wickard said. "This new program will assist in providing some relief to the dairy industry in Indiana and across the nation."

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 to produce milk.

"I have witnessed first-hand the power of FSA's delivery system with over $4.2 million direct deposited into Hoosier farmers' bank accounts on day one of the program," Wickard said. "Indiana's dedicated FSA employees deserve a great day of credit in the delivery of this critical assistance to farmers."

Eligible producers will receive a one-time direct payment based on the amount of milk both produced and commercially marketed by their operations 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 payments, using a six-million pound per dairy operation limit.

Dairy producers who have production records at USDA Farm Service Agency (FSA) county offices, 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 complete new applications.

A national per hundred weight payment rate was determined by dividing $290 million available funding, less a reserve established by FSA, divided by the total pounds of eligible milk production approved for payment. The reserve will cover new applicants and appeals. The payment rate is $0.3211641 per cwt.

To be eligible for DELAP, dairy producers and the dairy operations in which producers have a share:

* Must have produced milk in the United States and marketed milk commercially any time from February through July 2009,

* Must have milk production data for those months, and

* 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 2006-2008 is not eligible for DELAP.

For more information and eligibility requirements on the new DELAP program, visit the local FSA office or log on to www.fsa.usda.gov.

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