Reaction of Senator Leahy -- Rising Dairy Feed Prices Trigger 1st MILC Payments To Dairy Farmers Since 2010

USDA Thursday announced the first payments to farmers since April 2010 under the basic dairy safety net program, the Milk Income Loss Contract (MILC) Program.  The new payments are triggered mostly by rising feed prices.  The MILC Program kicks in when milk prices fall substantially below the costs of production.

Senator Patrick Leahy (D-Vt.) says the cost pressures facing farmers spotlight the need for effective reforms in dairy programs in the upcoming 2012 Farm Bill.  Leahy is the most senior member of the Senate Agriculture Committee, which has begun the process of putting the Farm Bill together.  Leahy, Senator Bernie Sanders (I-Vt.) and Rep. Peter Welch (D-Vt.) are working together on dairy components of the Farm Bill and also have proposed a short-term extension of the MILC Program to bridge dairy farmers’ needs before a new Farm Bill is in place.

Leahy said, “It should concern everyone that 2012 is shaping up as another difficult year for Vermont dairy farmers.  USDA has just announced that for the first time in almost two years, Vermont dairy farmers are eligible for help under the MILC Program.  With rising feed prices dairy farmers’ margins are being squeezed from both directions.  This is another reminder of why it is so important that we act to reform dairy programs in the next Farm Bill.  We must find a way to offer dairy farmers a useful safety net to help when margins shrink, and also to help end the rollercoaster rides that have characterized milk prices.”

# # # # #



USDA Announces Milk Income Loss Contract Program

Payment Rate for February Production


WASHINGTON, March 29, 2012—U.S Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Bruce Nelson today announced the February payment rate for the Milk Income Loss Contract (MILC) program. The February MILC payment rate is

$0.3895043 per hundredweight.  This is the first time there has been a payment for MILC since April 2010.

“Dairy producers are affected by the market price for milk and the price of feed to sustain their herds,” said Nelson. “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.”

MILC payments are triggered when the Boston Class I milk price falls below $16.94 per hundredweight, after adjustment for the cost of dairy feed rations. MILC payments are calculated each month using the latest milk price and feed cost.

The 2008 Farm Bill authorized MILC through Sept. 30, 2012. Producers must meet the Average Adjusted Gross Income requirement and provide marketing data to the FSA County Office in order to qualify. New dairy producers can apply for program benefits anytime through Sept. 30, 2012, at local FSA offices.

Additional information about the MILC program can be found here , or by visiting a local FSA Service Center.


Press Contact

David Carle: 202-224-3693