USDA Announces New Dairy Economic Loss Assistance Payment Program to Provide Financial Relief to Struggling Dairy Producers

WASHINGTON, Dec. 17, 2009 – Agriculture Secretary Tom Vilsack today announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program. The 2010 Agricultural Appropriations Bill authorized $290 million for loss assistance payments to eligible dairy producers.

“Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times,” said Vilsack. “I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we’ll be able to offer them help.”

Milk prices declined substantially through early-to-mid-2009, with the national price for milk averaging $16.80 per hundredweight (cwt.) in the fourth quarter of 2008 and averaging $12.23 per cwt. in the first quarter of 2009, a 27-percent decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.

“The dedicated employees of the Farm Service Agency deserve a great deal of credit for acting quickly to provide this critical assistance to America’s dairy farmers,” said Jim Miller, Under Secretary of USDA Farm and Foreign Agricultural Services.

Eligible producers will receive a one-time direct payment based on the amount of milk both produced and commercially marketed by their operation during the months of February through July 2009. Production information from these months will be used to estimate a full year’s production for an operation to calculate the payments, using a 6-million pound per dairy operation limit.

Dairy producers who have production records at the USDA Farm Service Agency (FSA) county office because they participated in another FSA dairy program do not need to apply for the program. FSA will use existing production records for February through July 2009 to calculate and issue their payments.

Producers who have not provided production data for those months to FSA, and have not already been contacted by FSA to provide such data, have 30 days, until Jan. 19, 2010, to apply. FSA officials estimate that more than 95 percent of eligible producers will receive benefits without having to fill out a new application.

A national per hundred weight payment rate will be determined by dividing the available funding of $290 million, less a reserve established by FSA, divided by the total pounds of eligible milk production approved for payment. Based on current information, FSA estimates that 875 million cwt. of milk production will be eligible for payment. The reserve will cover new applicants and appeals. The expected payment rate is approximately $0.32 per cwt.

To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share:

• Must have produced milk in the United States and marketed milk commercially at any time from February through July 2009
• Must have milk production data for those months
• Must certify to all milk production produced and marketed by the dairy operation during that time
• Also, any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP

For more information and eligibility requirements on the new DELAP program, please visit your local FSA county office or www.fsa.usda.gov.

Through much of this past year, USDA took a number of steps to provide relief to dairy farmers around the country. Some of these steps include:

USDA reactivated USDA’s Dairy Export Incentive Program (DEIP), to help U.S. dairy exporters meet prevailing world prices in addition to encouraging the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries.

USDA spent approximately $1 billion in fiscal year 2009 on purchases of dairy products (Dairy Product Price Support Program) and payments to producers (Milk Income Loss Contract (MILC).

USDA increased the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP). USDA estimates that these increases, which were in place from August 2009 through October 2009, increased dairy farmers’ revenue by approximately $243 million.

In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA’s Food and Nutrition Service, which will not only remove inventory from the market, but also support low-income families struggling to put nutritious food on their tables.

USDA is an equal opportunity provider, employer and lender. To file a complaint of discrimination, write: USDA, Director, Office of Civil Rights, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (800) 795-3272(voice), or (202) 720-6382 (TDD)

Agriculture Alert – Sorting out the NY CAFO Permit options for 2010

With the New Year, it is time to review New York CAFO options and consider steps for getting covered under the new permit structure. We are still waiting for the second CAFO permit option expected to be offered by DEC: the Clean Water Act (CWA) permit for farms that discharge or Large CAFOs that have not implemented their CNMP. Remember that farms with a fully implemented and properly maintained CNMP are deemed to be designed, implemented and operated to not discharge and so are eligible for New York’s Environmental Conservation Law (ECL) CAFO permit released in June 2009.

DEC recently announced that they will not be processing any Notice of Intent forms for the ECL permit sent in by farms in 2009 until after January 1, 2010. This is a good thing as it will allow these farms to make their annual report in March 2010 the same way they did in 2009. Similarly, all previously permitted farms that file their Notice of Intent (NOI) for the new ECL Permit after January 1, 2010, will be able to make their 2009 annual report in the same format as the 2008 annual report.

All farms of CAFO size need to talk with a Certified Planner to help sort out the permit decisions and properly file paperwork with DEC. Existing CAFOs have a couple of choices depending on whether the farm is Medium or Large CAFO size:

Medium CAFO farms that have been operating under a permit (GP 04-02) were supposed to fully implement their CNMP by June 30, 2009. The new ECL permit gives Medium CAFOs until 2012 (or 2014 under certain circumstances) to implement the CNMP. There is strong incentive for Medium CAFOs to file for the new ECL permit after January 1, 2010 so long as they have had manure storage structures evaluated by an engineer and meet the other requirements set out by DEC.

Large CAFOs have two potential courses of action: 1) they may go ahead and file for the new ECL permit after January 1, 2010 so long as they have fully implemented their CNMP and practices are being properly operated and maintained; or 2) even if the CNMP is fully implemented, a farm may elect to maintain permit coverage under the GP 04-02 CWA permit and decide whether to file for the ECL permit once the new CWA permit is released. At the present time, neither option appears to offer any significant strategic advantage. Under option 2, based on the DRAFT CWA Permit released in December 2008, farms remaining under GP 04-02 until the new CWA permit is released will have 6 months from the permit’s issuance to decide which permit to use and to file the appropriate paperwork. If you are not sure which direction is right for your farm, or if you think you may need to continue Clean Water Act permit coverage under the new permit structure, you should consult with an attorney.

Under new DEC requirements, farms that are Medium CAFO size (200 or more cows of milking age or 300 or more heifers of any age) but have not been operating under a CAFO permit will need to get an ECL or CWA Permit by March 31, 2010. If you have not contacted a Certified CAFO planner, it would be wise to do so as soon as possible. A list of Certified CAFO planners can be found at www.agmkt.state.ny.us/SoilWater/aem/cnmp.html by clicking on “AEM Certified Planner Directory”.

Karl Czymmek
PRO-DAIRY

2010 Don Lake Stormwater Training Series

The Central New York Planning and Development Board (CNY RPDB) is pleased to present the Spring 2010 Stormwater Management Training Series. This series of full-day courses—previously offered through SUNY College of Environmental Science and Forestry—will prepare participants to meet the challenges of effective stormwatrer management. Continuing education credits will be available for all completed courses.

Visit the following website for more information: www.cnyrpdb.org/stormwater/training2010.asp

State to Help Dairy Farmers with Workshops

ALBANY – New York State Agriculture Commissioner Patrick Hooker has announced four upcoming workshops designed to help dairy farmers optimize their income while minimizing risk during times of uncertain and volatile milk and input prices.

Managing the Margin workshops will teach producers effective risk management strategies they can use to control price risks and improve their bottom line.

“These workshops will help producers better understand volatility in markets, how that volatility is changing, and what it means for managing the farm business,” Hooker said. “The challenge for producers today is much more than just a ‘good’ milk price; rather, it is how profits are made at the margin, a margin that is constantly changing.”

Each day-long program is being coordinated by Ag and Markets’ Crop Insurance Education Program and funded by the USDA Risk Management Agency. The full-day program was developed and will be conducted by John Berry, a former dairy farmer who now works for Cooperative Extension in Pennsylvania.

“Milk prices have always had their peaks and valleys; and input costs, such as feed and fertilizer, vary unpredictably as well,” Hooker said. “John will explain what the financial sector calls “margin risk management” and how dairy farmers, regardless of
their herd size, can better plan buying and selling decisions to ensure a greater margin.”

Over the past two years, the dairy industry has experienced unprecedented price variations on both inputs and outputs, resulting in extreme, and many times record-setting, highs and lows. Given the enhanced volatility in the marketplace, understanding and managing margin risk has become increasingly important for producers.

The four workshops sponsored by the department are all scheduled for January. The program begins at 10 a.m. and runs until 3 p.m. There is a $15 registration fee, which secures a spot at the workshop and lunch. Space is limited, so early registration is recommended.

Tuesday, Jan. 12, Bath, Bath Civil Defense Center, State Route 54 North, RSVP to Jim Grace at 607-664-2316 or email jwg8@cornell.edu.

Wednesday, Jan. 13, Dryden, Dryden Fire Hall, Route 13, RSVP to Sharon VanDeuson at 607-753-5078 or email shv7@cornell.edu.

Thursday, Jan. 14, Auburn, Cooperative Extension of Cayuga County, 248 Grant Avenue, RSVP to Daniel Welch at 315-255-1183 x234.

Friday, Jan. 15, Richfield Springs, Tally-Ho Restaurant, State Route 20, RSVP to Kevin Ganoe at 315-866-7920 x230 or email khg2@cornell.edu.

The New York Farm Viability Institute, in conjunction with the New York Center for Dairy Excellence, will offer five additional workshops in other regions of the State in February. Those dates and locations will be announced soon by the New York Center for Dairy Excellence.

Funding for the workshops is provided by the USDA Risk Management Agency and the New York State Department of Agriculture and Markets as a component of their cooperative agreement to provide risk management and crop insurance education to New York producers.

Source: New York farm Bureau, Grassroots, January 2010