Dairy producers can file for federal reimbursements Tuesday

Beginning Tuesday, local dairy producers can file for federal reimbursements for losses caused by market fluctuations.

The U.S. Department of Agriculture Farm Service Agency announced it will begin issuing payments to dairy farmers enrolled in the Milk Income Loss Contract (MILC) program for September 2012 marketings. MILC payments are calculated monthly and are triggered when the Boston Class I milk price falls below $16.94 per hundredweight after adjusting for the cost of feed.

John Schoen of Schoen Farms Inc., a dairy farm near Oak Ridge, said feed prices in August and September went up by about 45 percent, but milk prices stayed roughly the same. Farms with 100 cows lost approximately $10,000 in that month alone, he said.

The MILC program helps offset fluctuations in prices that destabilize farmers' budgets, Schoen said.

"It's kind of like a little bit of an insurance policy from the government to the producers to kind of guarantee that we can still make enough money to keep the doors open," Schoen said.

For September 2012, the payment rate is approximately 59 cents per hundredweight. For October, the payment is approximately 2 cents per hundredweight. For November, the payment will be zero.

The reimbursement is reduced in months that milk prices rose to come in line with feed prices, Schoen said.

It's not just dairy producers who are affected; buyers of milk and milk products such as cheese and ice cream also have to deal with it.

"If we didn't have some of these programs in place, we would see such great fluctuations in all food products that it would be a big shock to the consumer," Schoen said.

The American Taxpayer Relief Act of 2012 extended the authorization of the Food, Conservation and Energy Act of 2008 -- also known as the 2008 Farm Bill -- through September 2013 for many programs, including MILC.

To enroll in the MILC program, farmers can contact their local Farm Service Agency or visit fsa.usda.gov.

salderman@semissourian.com

388-3646

Pertinent address:

Oak Ridge, Mo.