Press release: USDA says MILC payments on way to dairy farmers

ALBUQUERQUE – Brenda Archuleta, Acting Executive Director of USDA’s
Farm Service Agency in New Mexico announced today that because of low
dairy prices across the country, producers participating in USDA’s Milk
Income Loss Contract (MILC) program will soon begin to receive payments.

“As a result of low dairy prices, we will soon begin distributing
MILC payments to ensure that dairy producers have the financial
assistance they need. This action will also stimulate local economies,”
said Archuleta.

USDA makes MILC payments on a monthly basis when the Boston Class I
milk price falls below $16.94 per hundredweight as adjusted for feed
costs. USDA determines the per hundredweight payment rate for the
applicable month by subtracting the Boston Class I price for that month
from the $16.94 MILC payment trigger price, established in the 2008
Farm Bill, as adjusted for feed costs, and multiplying the difference
by 45 percent. The monthly Boston price along with final MILC payment
rates are posted online at:

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. USDA’s National Agricultural Statistics Service released
the data for determining the Average Dairy Feed Ration Cost for the
month of February on March 30, 2009. Using this information and the
formula contained in the 2008 Act, the MILC payment trigger for the
month of February has been adjusted to $17.33, for a final MILC payment
rate of $1.5132. Beginning today, USDA expects to issue approximately
$150 million to dairy producers for milk produced in February.

USDA’s Agricultural Marketing Service announced the Boston Class I
price for the month of March on Feb. 20, 2009 and for the month of
April on March 20, 2009. In both instances, the Boston Class I price
was below the MILC payment trigger price of $16.94 per cwt. USDA
expects to issue MILC payments on milk produced in March in early May
and MILC payments on milk produced in April in early June, after USDA
has adjusted the MILC payment trigger price for feed costs and
determined the final payment rate for those months. MILC payments may
also be triggered in future months if the MILC payment trigger price is
below $16.94 per cwt.

FSA makes payments 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.

For more information about the MILC program, please visit your FSA county office or

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