Dairy Prices to Trigger MILC Payments

Changes to Program Will Slow Turnaround Time

LANCASTER, Pa. — Kathy Heil, county executive director for USDA’s Farm Service Agency in Lancaster announced Tuesday that because of low milk prices FSA will be making payment in April to producers through the FSA’s Milk Income Loss Contract, or MILC, program.

The 2008 Farm Bill made changes to the MILC program, most notably the addition of a dairy feed ration cost adjustment in addition to changes to the payment rate and modifications to the per-operation poundage limit, depending on when the milk is produced.

“We will be making MILC payments as a result of the low prices but because of the changes to the program ordered in the 2008 Farm bill, the payments may be higher but will take a bit long to gather the required data before payments can be made,” Heil said.

FSA makes MILC payments on a monthly basis when the Boston Class I milk price falls below $16.94 per hundredweight (cwt) as adjusted for feed costs.

The MILC payment trigger price of $16.94 is adjusted upward when the National Average Dairy Feed Ration Cost for a month is greater than $7.35 per cwt.

FSA makes payments on up to the maximum eligible pounds of milk produced and marketed by each operation per fiscal year. The annual maximum eligible pound limit per dairy operation is 2,985,000 pounds per fiscal year.

MILC participants must select a month for which FSA will begin issuing payments for each fiscal year. Starting with the selected month, FSA will issue MILC payments based on that month’s milk production and the milk production for each consecutive month thereafter with an effective payment rate until the operation reaches the production cap or the fiscal year ends.

Dairy producers have the option to select the month in which the contract application is submitted as their start month, or select a later start month on, or before, the 14th of the month before the month which they want to receive payments and before the selected month’s Boston Class I fluid price is announced to the public. Also, any change to subsequent start months must be made by the 14th of the month prior to the month originally selected. If no changes are made, the start month will automatically roll over into the next fiscal year.

The 2008 Farm Bill excludes payments to producers whose non-farm average adjusted gross income (AGI) exceeds $500,000. An AGI statement to this effect will be required at signup. It has been determined that payments will be earned both February and March.

Contact your local FSA office to enroll.