Dairy Pipeline: March 2009
Extension Agent, Rockingham County
(540) 564-3080; email@example.com
Under the old MILC program, payments were calculated and directly deposited into producer accounts. The addition of the feed cost calculator will significantly lengthen the time needed to process producer payments as national feed price data must be assembled before payments can be calculated. The Advanced Class 1 Price for Boston is announced no later than the 23rd of the previous month. On January 23rd, we knew that the Class 1 price for Boston would be $13.97, $2.97 less than the target price of $16.94. These figures show that MILC enrollees will receive at least a $1.34/cwt supplement ($2.97 x 45%) from the federal government. However, the actual MILC payment rate cannot be calculated until FSA receives the National Ag Statistic Service data to calculate the National Average Dairy Feed Ration Cost. Acting State Executive Director for FSA in Virginia, Michael Wooden indicated that it would be late March before February feed data is available and April before actual payments could be made. He also indicated that in the future, FSA would issue payments no later than 60 days after production evidence is received for a given month or when the entire month’s National Average Dairy Feed Ration cost is posted for that month, whichever is later.
Dairy farmers can roughly predict the MILC payment rate for any month as the advance class I price is released. Advance class pricing release dates can be viewed at the following website: http:// www.fmmone.com/Northeast_Order/Dates/PriceReleaseDate2009.pdf. The actual announced Class 1 Boston price can be viewed at the following website: http://www.fmmone.com/Northeast_Order_Prices/ NE_Prices_main_new.htm#Advance.
Historical milk prices show that the difference between the Class 1 price in Boston and Federal Order 5 (Appalachian) Uniform Blend Price is about - $1.20. Thus, with a February 2009 Class 1 Boston price of $13.97, and no significant over order premiums, producers could expect a blend price of around $12.77/cwt. Add to this the anticipated MILC supplement of $1.34 and it is realistic to expect that producers would receive at least $14.11/cwt to run their operations. Note that this assumes 3.5 % fat test, no premiums for quality or quantity and does not factor in any additional value for VA Milk Commission Base.
Please contact your local Dairy Agent or FSA Office for further assistance in learning about how the MILC program will affect your income in 2009.
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