As part of the 2021 Consolidated Appropriations Act, USDA was directed by Congress to create a program to promote donations of eligible dairy products and reduce food waste, with a total price tag of $400 million.
The program period for eligibility is Jan. 1, 2020, until all program funds are used.
Partnerships can apply for at least partial reimbursement for the costs of the eligible donated dairy products. Eligible dairy organizations (EDO) must account to a Federal Milk Marketing Order (FMMO) and incur eligible expenses for the eligible donations.
Eligible food distributors include food banks, churches, shelters and soup kitchens.
If you do not already file a report with an FMMO, that does not prevent you from being eligible for the program.
According to USDA, EDOs that do not already file a report must file a receipts and utilization report to an FMMO office. This report would contain information about the fluid products and/or bulk dairy commodity products purchased and how they were used to produce donation-eligible dairy products.
Reports must also be filed for each month of production of donated products. Since most processors and producers (including cooperatives) might not know at the time of production that they will be donating, the reports can be filed after the fact.
The Dairy Donation Program (DDP) has extensive and detailed information available on how to complete an application and submit it for review at https://www.ams.usda.gov/services/ddp
USDA outlines seven steps for the application, review and reimbursement process:
- Processor/producer partners with an eligible distribution center.
- Processor/producer submits a form, which is being referred to as a plan, at the DDP website.
- Distributor submits certification form, which is proof of nonprofit status and ability to distribute dairy products.
- USDA Agricultural Marketing Service (AMS) confirms processor/producer accounts to an FMMO.
- AMS approves (or rejects) the donation and distribution plan.
- Assuming the plan is approved, the processor/producer submits requests for reimbursement of eligible costs.
- AMS provides reimbursement to processor/producer.
More description and explanation of these steps is provided on the DDP website.
Costs eligible for reimbursement include the cost of the milk to make the donated product; standard cost of manufacturing the product; and certain transportation costs based on diesel fuel, distance to the distribution center and a fuel economy rate.
AMS will “reimburse for donations made based on the class of milk used to make the donated dairy product and the class price for the month the dairy product is produced.”
Manufacturing costs will be reimbursed based on FMMO allowance levels, as they are generally considered to be representative of the costs of manufacturing dairy products from raw milk.
Transportation costs will be based on the U.S. average diesel prices for the month in which the donation was made, a fuel economy factor of 6.1 miles per gallon, and the shortest distance between the processor/producer and the distribution center.
Program participants can submit requests for reimbursement as often as necessary and at any time.
Further clarification and guidelines can be found on the DDP website.
The Pennsylvania Milk Marketing Board supports the donation of dairy products to distribution centers that serve individuals and families within the commonwealth. We hope that many of our Pennsylvania processors and producers participate in this program.
We are also always available to respond to questions and concerns. I can be reached at 717-210-8244 or by email at email@example.com.