April 2, 2009

Low dairy prices are triggering US Department of Agriculture support payments to producers participating in the Milk Income Loss Contract programme and bringing on another round of herd buyouts from a producer cooperative.

Secretary of Agriculture Tom Vilsack's office said in a release Wednesday (April 1) the USDA makes MILC payments on a monthly basis when the Boston Class I milk price falls below US$16.94 per hundredweight as adjusted for feed costs.

The MILC payment trigger price of US$16.94 is adjusted upward when the National Average Dairy Feed Ration Cost for a month is greater than US$7.35 per hundredweight, the USDA said. The February trigger prices was adjusted to US$17.33, the USDA said.

Beginning April 1, the USDA said it expects to issue about US$150 million to dairy producers for milk produced in February.

Also because of continuing low milk prices and extended losses by dairy producers, Cooperatives Working Together announced Wednesday that it will conduct its latest herd retirement. Bids will be accepted through May 1.

Cooperatives Working Together is funded by dairy cooperatives and individual dairy farmers who are contributing US$0.10 per hundredweight assessment on their milk production through December 2010.

This is the seventh herd retirement since CWT began operations in the summer of 2003, the group said.