By MEGGIE. I. FOSTER
Assistant Editor

WASHINGTON, D.C. — In mid-December, USDA Secretary Tom Vilsack announced the implementation of a new program that will provide much-needed financial assistance to struggling U.S. dairy producers.

Through the 2010 Agricultural Appropriations Bill, $290 million will be authorized for loan payments to eligible producers under the newly formed Dairy Economic Loss Assistance Payment (DELAP) program.

“Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times,” said Vilsack. “I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we’ll be able to offer them help.”

Milk prices declined significantly through 2009, with the national price for milk averaging $16.80 per cwt. in the fourth quarter of 2008 and averaging $12.23 per cwt. in the first quarter of 2009, a 27 percent decline, according to Vilsack. 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.

“The dairy industry has been impacted significantly during these tough economic times,” said Julia Wickard, executive director USDA’s Farm Service Agency in Indiana. “This new program will assist in providing some relief to the dairy industry in Indiana and across the nation.”

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 6 million pound per dairy operation limit.

Producers who have production records at the USDA Farm Service Agency (FSA) county office do not need to apply for this program because they’ve participated in another FSA dairy program. FSA will utilize existing production records for February through July 2009 to calculate and issue their payments. At that point, a national per cwt. payment rate will be calculated 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.

Based on current data, FSA estimates that 875 million cwt. of milk production will be eligible for payment. The reserve will cover new applications and appeals. The expected payment rate is approximately 32-cents per cwt.

Specific eligibility requirements ask that applicants:
•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.

Additionally, any dairy farmer who has an annual average adjusted gross non-farm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for participation in the DELAP program.

“I have witnessed first-hand the power of FSA’s delivery system with over $4.2 million directly deposited into Hoosier farmers’ bank accounts on day one of this program,” said Wickard. “Indiana’s dedicated FSA employees deserve a great deal of credit in the delivery of this critical assistance to farmers (in our state.)”
For more details, visit a local FSA office or go online to www.fsa.usda.gov