USDA announces payment to Milk Income Loss program
NORWICH – The U.S. Department of Agriculture announced it has made a fiscal contribution to its Milk Income Loss Contract program to help struggling dairy farmers as they battle costly feed prices and low milk prices.
At the end of March, the USDA reported the payment rate for the MILC program was $.3895 per hundredweight during the month of February, which translates to approximately .39 cents per 11.6 gallons of milk produced for dairy farmers. This is the first time the USDA has made a payment for MILC since April 2010.
The MILC program, established by the USDA as part of the 2008 Farm Bill, is designed to assist dairy farmers who lost money during production due to the low price of milk and the high cost of production. In addition to the original milk price, supplemental MILC payments begin when the price of Boston class I milk (milk used for bottling) falls below $16.94/cwt, after adjusting the cost of dairy feed rations. The MILC payments are updated monthly using a financial formula that takes into account the most up-to-date milk price and feed cost.
“Dairy producers are affected by the market price for milk and the price of feed to sustain their herds,” stated USDA Farm Service Agency Administrator Bruce Nelson in a recent press release. “While milk prices have remained above the $16.94 base used in the MILC calculation, the increase in feed prices has triggered payments because of the feed ration component.”
Although the USDA says this latest contribution is a beneficial boost for struggling dairy farms that suffered income loss during the month of February, some local promoters of the dairy industry say it’s not a solution to the real problems facing small dairy farmers. They also question the effectiveness of the MILC program. According to Ken “Mr. Milk” Dibbell, one of the county’s most adherent dairy advocates, the program is misleading.
“They always come up with a Band-Aid solution instead of a addressing the real problem,” said Dibbell. “Four-fifths of the nation’s dairy producers were wiped out by the processing system ... We don’t need to be given a government hand-out. We need to be paid the price of what it costs to produce,” he said.
Dibbell went on to say that the biggest disadvantage in figuring MILC payments is that they are determined by the cost of production in only one sector of the country (the Boston area) and while the formula used in figuring MILC payments includes the cost of feed, it doesn’t incorporate the rising cost of fuel, he noted. In short, farmers are simply not being paid enough for what they produce, he said.
“You can’t pay $5 expenses with 15 cents per hundredweight,” he said.
In January, Dibbell lobbied local lawmakers to support the Milk Marketing Improvement Act of 2011, formerly known as the Spector-Casey Bill, as a way of keeping small dairies in business. The MMIA would price raw milk at the farm gate based on the average cost of production as determined by the USDA. The bill was officially backed by the Chenango County Board of Supervisor in November.
The 2008 Farm Bill authorized MILC through Sept. 30, 2012. Producers must meet the average adjusted gross income requirements and provide marketing data to the Farm Service Agency county office in order to qualify. New dairy producers can apply for program benefits anytime through September 30 at local FSA offices.
At the end of March, the USDA reported the payment rate for the MILC program was $.3895 per hundredweight during the month of February, which translates to approximately .39 cents per 11.6 gallons of milk produced for dairy farmers. This is the first time the USDA has made a payment for MILC since April 2010.
The MILC program, established by the USDA as part of the 2008 Farm Bill, is designed to assist dairy farmers who lost money during production due to the low price of milk and the high cost of production. In addition to the original milk price, supplemental MILC payments begin when the price of Boston class I milk (milk used for bottling) falls below $16.94/cwt, after adjusting the cost of dairy feed rations. The MILC payments are updated monthly using a financial formula that takes into account the most up-to-date milk price and feed cost.
“Dairy producers are affected by the market price for milk and the price of feed to sustain their herds,” stated USDA Farm Service Agency Administrator Bruce Nelson in a recent press release. “While milk prices have remained above the $16.94 base used in the MILC calculation, the increase in feed prices has triggered payments because of the feed ration component.”
Although the USDA says this latest contribution is a beneficial boost for struggling dairy farms that suffered income loss during the month of February, some local promoters of the dairy industry say it’s not a solution to the real problems facing small dairy farmers. They also question the effectiveness of the MILC program. According to Ken “Mr. Milk” Dibbell, one of the county’s most adherent dairy advocates, the program is misleading.
“They always come up with a Band-Aid solution instead of a addressing the real problem,” said Dibbell. “Four-fifths of the nation’s dairy producers were wiped out by the processing system ... We don’t need to be given a government hand-out. We need to be paid the price of what it costs to produce,” he said.
Dibbell went on to say that the biggest disadvantage in figuring MILC payments is that they are determined by the cost of production in only one sector of the country (the Boston area) and while the formula used in figuring MILC payments includes the cost of feed, it doesn’t incorporate the rising cost of fuel, he noted. In short, farmers are simply not being paid enough for what they produce, he said.
“You can’t pay $5 expenses with 15 cents per hundredweight,” he said.
In January, Dibbell lobbied local lawmakers to support the Milk Marketing Improvement Act of 2011, formerly known as the Spector-Casey Bill, as a way of keeping small dairies in business. The MMIA would price raw milk at the farm gate based on the average cost of production as determined by the USDA. The bill was officially backed by the Chenango County Board of Supervisor in November.
The 2008 Farm Bill authorized MILC through Sept. 30, 2012. Producers must meet the average adjusted gross income requirements and provide marketing data to the Farm Service Agency county office in order to qualify. New dairy producers can apply for program benefits anytime through September 30 at local FSA offices.
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