Wallaces Farmer

Can a dairy farmer choose the months he or she takes payments for the Milk Income Loss Program?

March 11, 2009

2 Min Read

FAQ: My 200-cow dairy herd will produce well over the 2.985 million lbs. of milk per year requirement to be eligible for Milk Income Loss Contract payments. I want to choose the months in which I take payments so that I get the highest monthly payment rates. Can I do that?
Answer: Provided by Robert Tigner, Iowa State University Extension farm management specialist.

You can choose the month of the year in which you start to take the MILC payments. But once you start, you must continue until you reach your 2.985 million pounds eligible for payments or the year ends. You cannot pick and choose among months to take MILC payments.

With milk prices now collapsing following two years of historical highs, MILC is a USDA dairy program reauthorized by the 2008 Farm Bill and it can provide some aid to dairy producers by adding additional income over the coming months. Dairy farmers are being encouraged to sign up for the Milk Income Loss Contract. It is a program that provides monthly payments to dairy farmers when market prices drop below the program’s defined trigger price.

Feed cost adjuster added to program

MILC was first authorized by the dairy title of the 2002 Farm Bill and after years of extensions has been included in the 2008 Farm Bill. However, MILC now includes a feed cost-adjuster and increases both the payment rate and production eligibility among small to medium size dairy farms.

MILC functions similarly to the old grain countercyclical payment programs. The program has an identified target or trigger price, and when the market price drops below that trigger price, the difference between the two is calculated and farmers receive 45% of the difference.

With MILC prices tumbling nearly 35% recently due to decreased domestic demand and decreased global demand and the outlook for 2009 looking grim, dairy farmers should contact their Farm Service Agency office quickly to learn more about signing up for the program.

There is absolutely no cost to sign up for MILC. Any producer not signed up yet, or who is thinking about not signing up needs to reconsider this opportunity. Participating in the previous MILC program does not automatically enroll you in the current program. New sign up forms must be completed and submitted.

If you have a question you’d like answered regarding the new USDA farm program, please send it to [email protected]. We will pass it on to the ISU Extension specialists or to the program specialists at USDA’s Farm Service Agency office in Des Moines and they will send you the answer.

For more information and analysis of the new farm program, see ISU’s Ag Decision Maker site www.extension.iastate.edu/agdm. For clarification on farm program details contact your local FSA office.

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