Officials at the U.S. Department of Agriculture (USDA) have informed Senator Herb Kohl and Congressman Dave Obey that the department will immediately begin distributing $290 million in direct assistance to dairy farmers that Kohl and Obey worked to include in the FY10 Agriculture Appropriations Bill. The bill also includes $60 million for the purchase of cheese and dairy product that will be used in food banks and other federal nutrition and feeding programs.
The Dairy Economic Loss Assistance Payment Program (DELAP) will provide one-time payments to assist eligible dairy producers who have experienced low milk prices and high production costs this year. Payments will be calculated based on twice an eligible producer's total pounds of production commercially marketed during the months of February 2009 through July 2009, up to a production maximum of six million pounds per dairy operation. USDA will begin processing payments to eligible dairy producers as early as December 17th. Additional information regarding DELAP can be found at local Farm Service Agency county offices or www.fsa.usda.gov.
"Dairy farmers across the country have been caught in a "price-cost squeeze' with milk prices that have sharply declined while production costs have remained high. We welcome the news that our dairy farmers will be receiving assistance soon. Our producers have not had many reasons to celebrate this year as they scrambled to keep their businesses alive. My hope is that these payments will bring a measure of relief to the hardships we witnessed in rural communities across our state and the country," Kohl said.
"The Administration said they would try to get the money out by the end of the year and they have kept their word. Based upon the information we have received, an average dairy farmer in Wisconsin with about 85 cows could be getting $5,000 or more. That comes on top of the $175 million Wisconsin farmers have already received this year under the MILC program, which averages about $13,000 per farmer. By the end of this year, total assistance to Wisconsin farmers could exceed $250 million," Obey said. "Everyone understands that this does not make these farmers whole for the losses they have taken because of the historically low prices this year. But it might be the difference between getting by or going out of business."
The FY10 Agriculture Appropriations bill, which included $350 million to help dairy farmers cope with low milk prices, was passed by an overwhelming majority in Congress and signed into law by the President on October 21, 2009. The Secretary of Agriculture has been working under an expedited rulemaking process to determine how this funding will be distributed.
Kohl and Obey have worked together for more than 10 years to ensure a better milk price safety net through direct payments when prices are low, and both supported provisions in the 2008 Farm Bill to strengthen the MILC program through inclusion of a "feed cost adjuster' designed to enhance MILC payments when farmers need them most. During fiscal year 2009, the USDA's Farm Service Agency has made more than $143 million in MILC payments to Wisconsin farmers. USDA has also taken steps to bolster dairy markets through the Dairy Export Incentives Program and temporary adjustments to the Dairy Product Price Support Program. In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA's Food and Nutrition Service in an effort to bolster markets and provide hunger relief.