Agricultural News
Time for Dairy Farmers to Time to Review Your MILC Contract
Sun, 28 Aug 2011 15:29:24 CDT
October 1st marks the start of a new fiscal year for the Federal Government, and therefore a new fiscal year for the Milk Income Loss Contract (MILC) program. While there is a lot of discusssion within the dairy industry about efforts in Congress to reform and improve the dairy "safety net" programs, as it stands now, the MILC and the Dairy Price Support programs continue to be our main safety nets for U.S. dairy farmers.
As a reminder, the MILC program provides cash payments to dairy farmers when the milk price drops below specific thresholds. There is no indication that the milk price will be low enough to trigger a payment under the MILC program in the near future. However, given the volatility in dairy markets, we simply don't know whether the program will trigger in for any of the months between October 1, 2011 and September 30, 2012.
The MILC program limits the payments made under the program to 2.985 million lbs. This is only about 3 months worth of milk production for a 500 cow dairy producing 65 lbs/head/day. Therefore, since these larger dairies may only be collecting payments for weeks or months, it's important to choose months with the highest payment rates in order to maximize the amount received under this program. So why does that matter right now? If your dairy is enrolled in the MILC program and you've chosen October of each year as your "start month," it's possible that you'd benefit from changing that.
If you keep your start month as October, and payments begin later in the fiscal year, you will have no choice but to begin collecting the subsidy payment as soon as it's available, regardless of whether it's an optimal month for your operation to do so. And if you'd like to change your month from October to a later month, you have only until September 14th to make that change. If you have any questions about the MILC program or your dairy's specific MILC contract, feel free to contact either your local Farm Services Agency office or Milk Producers Council at (909) 628-6018.
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