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The nation’s struggling dairy farmers received a $290 million boost from the U.S. Department of Agriculture Thursday.
The department is implementing a new program, the Dairy Economic Loss Assistance Program, which was authorized by the 2010 agriculture appropriations bill and will provide loss assistance payments to eligible dairy farmers.
U.S. Secretary of Agriculture Tom Vilsack (file photo)
“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 U.S. Secretary of Agriculture Tom Vilsack.
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 cwt in the first quarter of 2009, an overall 27 percent decline. 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 it.
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 payments, using a 6 million pound per dairy operation limit.
Dairy producers who have production records at the USDA Farm Service Agency county office because they participated in another FSA dairy program do not need to apply for the program. The agency will use the existing production records to calculate and issue payments. Those who have not provided records to their local FSA, and have not yet been contacted to do so, will have until Jan. 19, 2010 to apply. Officials estimate, however, that more than 95 percent of eligible producers will receive benefits without having to complete a new agency application.
A national per hundred weight payment rate will be determined by dividing the available funding of $290 million, less a FSA reserve for new applicants and appeals, divided by the total pounds of eligible milk production approved for payment. The FSA is currently estimating that 875 million cwt of milk production will be eligible for payment, and that the expected payment rate is approximately 32 cents per cwt.
U.S. Rep. Leonard Boswell, a Democrat who represents Iowa’s 3rd District and a senior member of the House Committee on Agriculture, applauded the swift implementation of the new program, noting that “Iowa’s 2,390 dairy farms have been struggling as milk prices have declined substantially this year.”
In order to be eligible for the program, the dairy producer and the dairy operation in which the producers has a share:
Full program information and eligibility requirements can be found on the FSA/USDA Web site.
The DELAP program is one emergency dairy assistance programs that has been implemented by the USDA in response to the producers’ economic crisis. The agency has previously increased the price that they paid dairy farmers for products through the Dairy Product Price Support Program from August through October 2009. The USDA’s Dairy Export Incentive Program was also reactivated to help exporters meet prevailing world food prices and encourage the development of export markets in areas where the U.S. products are not competitive due to subsidized dairy products from other countries. The agency also established a Dairy Industry Advisory Committee.
Update 12/18/2009, 2:50 p.m. — Gov. Chet Culver released the following statement in connection with the implementation of the DELAP program: “2009 has been a tough year for Iowans — especially our dairy producers, and I want to thank President Obama, Secretary Vilsack and the Obama administration for creating this program and providing immediate relief to dairy producers. We know that there is still much work to do, but this announcement is a great holiday present for the thousands of Iowans who make a living producing milk and other dairy products. As Governor, I will continue to do all I can to help not only dairy producers, but all Iowa farmers who have suffered this year from low prices. I look forward to continuing our work with the Obama administration, our federal partners, and all Iowans as together we help this vital industry and build a brighter future for the state.”
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