news

Congressman Paul Tonko, a member of the Congressional Dairy Farmers Caucus, applauds Agriculture Secretary Tom Vilsack’s announcement of the implementation of the new Dairy Economic Loss Assistance Program, or DELAP.  The funding was authorized in the 2010 Agricultural Appropriations Bill for $290 million to eligible farmers.

“I cannot tell you how many times, since taking office in January, that one of the local dairy farmers in the 21st Congressional District has said to me that they’ve never seen conditions as bad as they are now,” said Rep. Tonko. “Well, this announcement today is a step towards easing those pains.  While it is not a panacea, it is a step in the right direction.  We must continue to work together to stabilize the market for our dairy farmers and the local businesses they support, not to mention the mouths they feed.  I applaud Secretary Vilsack for getting these funds out in time for the Holiday Season.”

Any dairy producer who has received a Milk Income Loss Contract (MILC) payment this past year will not have to sign up for the DELAP payments as the local Farm Service Agency already has their milk production information.  The payment rate will be 32 cents per hundredweight and will be based on milk production for the six month period of February 1st, 2009 to July 31st, 2009.  Once the production level for that period is calculated it will be multiplied by a factor of 2 to come up with the total amount of milk production that will be covered.

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.

For example, a 100 cow dairy farm that produced one million pounds of milk for the six month period from February to July, will be doubled to 2 million pounds.  Then the payment of 32 cents per hundredweight will be multiplied by the two million pounds (2 million pounds divided by 100 equals 20,000 hundredweights) --- which means that a 100 cow dairy would receive a total DELAP payment of $6,400 in one lump sum.  A 300 cow multi-family operation that produced 6 millions pounds of milk would receive a payment of $19,200.

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.

                                                                                             # # #