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Dairy producers receive $290 million for economic losses

By West Central Tribune

WILLMAR — As authorized by Congress in the 2010 Agricultural Appropriations Act, the U.S. Department of Agriculture is issuing $290 million in economic loss assistance payments to assist our nation’s dairy producers, who have had a very difficult year economically due to a steep and extended decline in milk prices combined with higher-than-normal feeding costs.

During the fourth quarter of 2008, the national price for milk averaged $16.80 per hundredweight. But by the first quarter of 2009, milk prices were averaging $12.23 per hundredweight, a decline of about 27 percent.

On average, the price received by U.S. dairy producers for milk marketed during the summer of 2009 was about half of what it cost to produce milk.

Eligible producers will receive a one-time payment based on the amount of milk produced and commercially marketed during the months of February through July 2009. To calculate the payments, milk production data from this 6-month period will be used to estimate a full year’s production, using a 6 million-pound limit per dairy operation.

Producers who have already provided milk production data to their Farm Service Agency office for the Milk Income Loss Contract program will not need to complete a new application for the additional one-time payment.

Producers who have not applied for the Milk Income Loss Contract Payment program will have until Jan. 19 to visit their local Farm Service Agency office and apply for the one-time direct payment.

Officials from USDA estimate that more than 95 percent of all eligible producers will receive benefits without having to complete a new application.

A national payment rate will be determined by dividing the available funding of $290 million, minus a small reserve for any new applicants, by the total pounds of milk production eligible for payment.

Based on current data, it’s estimated that 875 million hundredweight of milk production will be eligible for payment, resulting in an expected payment rate of approximately $0.32 per hundredweight.

USDA to purchase $60 million in cheese and cheese products

In addition to providing $290 million in direct payments to dairy producers, the 2010 Agricultural Appropriations Act also directed USDA to purchase $60 million in cheese and cheese products for use in domestic feeding programs.

In addition to providing market benefits for U.S. dairy producers, the cheese purchases will help supplement the government’s supply of food for use in domestic feeding programs at a time when the demand on the nation’s food banks has reached an all-time high.

The purchase continues USDA’s long history of delivering nutritional assistance through a number of domestic and international feeding programs, including 15 domestic nutrition programs that are estimated to touch the lives of one out of every five people in America each day.

USDA, dairy producers agree to 25 percent reduction in greenhouse gases

Officials from the U.S. Department of Agriculture have announced an agreement with American dairy producers to accelerate the adoption of innovation projects that convert manure into electricity. Under a collaborative public and private partnership agreement, the Innovation Center for U.S. Dairy, U.S. dairy producers and USDA will work together to reach a 25 percent reduction in greenhouse gas emissions by the year 2020.

The agreement has the objectives of providing dairy farmers with additional income, provide a source of renewable electricity, and reduce our dependence on fossil fuels while also benefiting the environment.

Under the agreement, USDA and the Innovation Center for U.S. Dairy will increase the number of anaerobic digesters supported by USDA programs. But in addition to promoting digesters, the agreement will encourage research and development of new technologies to help dairies reduce greenhouse gas emissions.

Anaerobic digester technology is a proven method of converting waste products, such as manure, into electricity. The technology utilizes generators that are fueled by the methane captured from animal manure.

Currently, only about 2 percent of the dairy operations in the U.S. that are candidates for a profitable digester are utilizing the technology. Dairy operations with anaerobic digesters routinely generate enough electricity to power 200 homes.

December interest rateis 1.375 percent

The interest rate on nine-month commodity loans disbursed during the month of December will be 1.375 percent, unchanged from November.

At 1.375 percent, the interest cost for a nine-month corn loan is about $0.02 per bushel. The cost for a nine-month soybean loan is less than $0.06 per bushel.

County loan rates vary slightly, but the loan rates for Kandiyohi County are $1.85 for corn, and $4.85 for soybeans.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County

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