USDA extends MILC program for dairy producers


The U.S. Department of Agriculture recently announced it will extend the Milk Income Loss Contract program. The new program is called the Milk Income Loss Contract Extension (MILCX).

Dairy operators who participated in the original program will have to sign a new contract to participate in MILCX.

The new program is effective for the 2006 fiscal year (Oct. 1, 2005, through Sept. 30, 2006), and the 2007 fiscal year (Oct. 1, 2006, through Sept. 30, 2007). But no MILCX payments will be earned on September 2007 milk production.

The initial signup ends on May 17, 2006. Applications will be accepted after May17 through the end of the program; however, producers will not be eligible for payment on months that have already passed, the month the contract is signed, or any future months where a payment rate has already been established.

Dairy producers are eligible if they produced milk in the United States and marketed the milk commercially in this country during the contract period.

MILCX payments occur in months when the price of Class I milk in Boston falls below $16.94 per hundred pounfs (cwt.).

Payment rates will be 34 percent of the difference between $16.94 and the Boston Class I price for that month.

Dairy operations will not receive a payment for months during which the Class I price in Boston is higher than $16.94. Payment rates already announced for fiscal year 2006 are: October 2005, $0; November 2005, $0; December 2005, $0.0408; January 2006, $0.1054; February 2006, $0.1054; March 2006, $0.4080.

FSA posts monthly MILCX payment rates online at www.fsa.

The maximum quantity eligible for payment in each fiscal year is 2.4 million pounds or 24,000 hundredweight per dairy operation.

Dairy operations that produce more than 24,000 hundredweight per fiscal year may choose a payment start month other than the beginning of the fiscal year in which to begin their contract.

All persons that receive a payment for milk produced by the dairy operation must sign the MILCX contract and submit milk production records to be eligible for payments.

Dairy producers are encouraged to contact their local Farm Service Agency before the May 17 deadline.

Bill Harmon is executive director of the FSA office in Marion County.

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