Bill extends MILC program; latest estimates updated
Vermont’s congressional delegation – U.S. Sens. Patrick Leahy and Bernie Sanders and Rep. Peter Welch – introduced legislation to extend the Milk Income Loss Contract (MILC) program beyond its expiration date at the end of fiscal year 2012. The MILC Continuation Act of 2012 would extend MILC for one year at current levels.
MILC payments are triggered when the Class I price in Boston falls below $16.94/cwt. Currently, the base payment rate is any positive difference between $16.94 and the Class I milk price at Boston, times 45%. There is also a “feed cost adjustor,” increasing the payment when the price of a cwt. of dairy feed rises above its target of $7.35/cwt.
Payments under the program are limited by production: Currently, producers are eligible to receive payments on up to 2.985 million lbs. per fiscal year.
Set to expire Oct. 1, 2012, the potential payment total also takes a significant hit in its final month, when payments drop from 45% to 34% of the difference in the $16.94/cwt. trigger and the actual Boston Class I price.
“Although the delegation is committed to passing a Farm Bill with dairy reforms this year, with prospects for that bill uncertain, this legislation would ensure there is no lapse in the safety net for dairy farmers,” they said in a press release.
Leahy, the most senior member of the Senate Ag Committee, said, “While many in agriculture are focused only on Sept. 30 when the Farm Bill expires, we in dairy know that we are in a unique position and the date that really matters is Aug. 31. We cannot have our nation’s dairy farmers left exposed without a sufficient safety net.
“The MILC Continuation Act addresses this problem and ensures an extension of the MILC program until we are able to enact the important dairy reforms we are negotiating for the Farm Bill,” Leahy continued. “We are working to include a Margin Insurance Program and a Dairy Stabilization Program. I remain committed to passing a Farm Bill this year, and I am pleased that Senator Stabenow, who chairs the Agriculture Committee, has announced a hearing schedule that will allow us to continue evaluating policy solutions so we can swiftly and effectively craft the 2012 Farm Bill.”
“Dairy is a major part of Vermont agriculture and farmers are entitled to a fair price. Vermont’s dairy farms are the backbone of our rural economy. The program we are working to renew will give farmers vital and essential support if milk prices fall – and enable dairy farmers to continue the productive work they do,” said Sen. Sanders. “Extending this program for a year will allow the Congress to come up with a long-term solution for the huge fluctuation in the price farmers are paid for their milk.”
Welch, a member of the House Agriculture Committee, said, “Vermont’s dairy farmers are hard-working and resilient. They have endured bad weather, high energy prices and low milk prices. What they cannot endure is the loss of this vital safety net. However Congress proceeds, it has to ensure dairy farmers are not left stranded.”