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Dairy producers begin receiving MILC payments

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Willmar, 56201
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR -- Due to a dramatic decline in milk prices, dairy producers are now receiving payments under the U.S. Department of Agriculture's Milk Income Loss Contract program.

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Initially authorized by the 2002 farm bill, and then reauthorized under the 2008 farm bill, the program provides monthly financial assistance whenever the Boston Class I milk price falls below the payment trigger price of $16.94 per hundredweight. In that case, dairy producers qualify for a payment rate equal to 45 percent of the price difference.

Under the provisions of the 2008 farm bill, the $16.94 trigger price is adjusted upward whenever the monthly national average dairy feed ration cost is greater than $7.35 per hundredweight.

According to USDA data, higher-than-normal feeding costs during the month of February warranted an upward adjustment of the $16.94 trigger price to $17.33, resulting in a final Milk Income Loss Contract payment rate of $1.5132 for milk produced that month.

In early April, local USDA Farm Service Agency offices began issuing payments to dairy producers for February milk production. It is anticipated that FSA offices across the nation will issue approximately $150 million in payments for February milk production.

The Boston Class I milk price for the months of March and April has already been determined. In both instances, the Boston Class I price was below the $16.94 trigger price. Therefore, USDA expects to issue Milk Income Loss Contract payments for milk produced in March by early May, with payments for April production issued in early June.

The final payment rates for the months of March and April will not be known until USDA determines if the $16.94 trigger price will need to be increased for feeding costs.

Under the Milk Income Loss Contract program, the maximum eligible pounds of milk produced and marketed by a dairy operation is limited to 2,985,000 pounds per fiscal year.

February milk production down 1 percent

Minnesota milk production during the month of February totaled 697 million pounds, down 1 percent from last February.

Minnesota milk production per cow averaged 1,490 pounds in February, down 30 pounds from one year ago.

The average number of milk cows on Minnesota farms during February averaged 468,000 head, up 5,000 from last February.

February milk production from the 23 major dairy states totaled 13.7 billion pounds, down 2.5 percent from one year ago.

USDA to reinstate base acreage on federal land

Officials from USDA have announced that the rule which terminated base acres on federally owned land has been rescinded. As a result, farmers who lease federal land are again eligible to receive payments under the Direct and Counter-cyclical Program.

The decision rescinds the part of the Direct and Counter-cyclical Program final rule, published on Dec. 23, which directed that beginning with the 2009 crop year, producers who lease federal land would no longer be eligible for payments authorized under the 2008 farm bill.

Minnesota corn, soybean planting intentions down from 2008

According to USDA's Prospective Planting Report released March 31, Minnesota's intended acreage of corn and soybeans is expected to decline slightly this year.

According to the report, Minnesota corn producers intend to plant 7.6 million acres this spring, down 1 percent from the 7.7 million acres planted in 2008.

Minnesota soybean growers are expected to plant 7 million acres in 2009, also down 1 percent from the 7.05 million acres planted in 2008.

Spring wheat acreage in Minnesota is expected to decline 5 percent, from the 1.85 million acres planted in 2008, to 1.75 million acres this year.

Minnesota sugar beet farmers intend to plant 445,000 acres this year, up slightly from the 440,000 planted in 2008.

The number of acres actually planted to each crop may change due to a number of factors. Such factors could include availability of credit, commodity price volatility and unexpected weather conditions.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.

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