Earlier this week Ag Secretary Tom Vilsack told Congress USDA is prepared to begin making payments in the Milk Income Loss Contract program. USDA determines the per hundredweight payment rate for the applicable month by subtracting the Boston Class I price for that month from the $16.94 MILC payment trigger price, established in the 2008 Farm Bill, as adjusted for feed costs, and multiplying the difference by 45%.
The MILC payment trigger price of $16.94 is adjusted upward when the National Average Dairy Feed Ration Cost for a month is greater than $7.35 per cwt. Using information provided by the National Agriculture Statistics Service, the MILC payment trigger for the month of February has been adjusted to $17.33, for a final MILC payment rate of $1.5132. USDA expects to issue approximately $50 million to dairy producers for milk produced in February.
USDA expects to issue MILC payments on milk produced in March in early May and MILC payments on milk produced in April in early June, after USDA has adjusted the MILC payment trigger price for feed costs and determined the final payment rate for those months.