Maine’s struggling dairy farmers are in line for $1.5 million in federal aid with the passage Thursday of the new Dairy Economic Loss Assistance Payment program, or DELAP.
The U.S. Department of Agriculture has authorized a total of $290 million for loss assistance payments to eligible dairy producers across the country.
Tim Drake, chairman of the Maine Milk Commission, said the payments amount to about $4,700 per farm.
He said that might not be enough to save some farms that are teetering financially. Prices over the past year have been at 1976 levels, pushing the dairy industry nationwide into crisis.
According to USDA, milk prices declined substantially through early to mid-2009, with the national price for milk averaging $16.80 per hundredweight in the fourth quarter of 2008 and averaging $12.23 per hundredweight 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 last two months have stayed static,” Drake said, “but from January 1st we are down 18 dairy farms.”
Drake said that at some point there would be too few dairy farms to maintain the agriculture infrastructure. “We probably won’t know when that will be until it is too late,” he said.
U.S. Sen. Susan Collins, a Maine Republican and member of the Senate Appropriations Committee, supported the program.
“Maine dairy farmers face tremendous difficulties,” she said Thursday. “The drastic drop in milk prices and the ever increasing costs of production have placed extreme strain on Maine’s dairy farms and the businesses that support them.”
Rep. Mike Michaud, a member of the Congressional Dairy Caucus, praised the program and the immediate help it will offer Maine’s dairy farmers.
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, according to USDA.
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 a USDA Farm Service Agency 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 payments.
Producers who have not provided production data for those months to FSA, and who have not been contacted already by FSA to provide such data, have 30 days, until Jan. 19, 2010, to apply. The expected payment rate is approximately 32 cents per 100 pounds of milk.
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, contact the local FSA county office or www.fsa.usda.gov.