May 30, 2002

Dairy Market Loss Payment To Be Made for June

A payment to dairy producers for the month of June will be made under the dairy market loss program of the 2002 Farm Bill, notes a farm management specialist at North Dakota State University.

The projected payment will be $1.20 per hundredweight of milk produced during the month of June, according to Dwight Aakre of the NDSU Extension Service. The announced June Class 1 price for Boston is $14.28.

The dairy market loss program pays all eligible dairy producers 45 percent of the difference between $16.94 and the Class1 fluid milk price in Boston. No payment is made for any month the Boston price is above $16.94. This program is retroactive to Dec. 1, 2001.

"Once USDA has completed the rule-making process they will announce a sign-up period. All dairy producers should contact their local county FSA office after the sign-up period has been announced, to schedule an appointment for completing an application for this program," Aakre says. "Producers will be responsible for providing evidence of marketings for each month a payment will be made."

The dairy market loss program is a compromise between dairy interests in the Northeast that were advocating a continuation of the Northeast Dairy Compact and Midwest and Western dairy interests that wanted to eliminate the Compact, Aakre says. The outcome is a national program very similar to the way the Northeast Dairy Compact was set up. The $16.94 target price is the same price used in the Compact. The 45 percent factor represents the approximate Class 1 utilization in the Boston market area. The Northeast Dairy Compact supported the Class 1 fluid milk price only. It had no effect on the portion of the raw milk price derived from manufactured products.

###

Source: Dwight Aakre, (701) 231-7378, daakre@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu