§7982 National Dairy Market Loss Payments

Summary

The law pays dairy producers in every State who sign a contract with the Secretary for milk they sell. Each month a producer’s payment is: the pounds of eligible milk sold that month times the difference between $16.94 per hundredweight and the Boston Class I milk price per hundredweight, times either 45% (from the first month they sign through September 30, 2005) or 34% (from October 1, 2005 through September 30, 2007). Short definitions: Class I milk — milk treated as Class I under a Federal milk marketing order. Eligible production — milk a producer makes in a participating State. Federal milk marketing order — an order under section 608c. Participating State — any State. Producer — someone who shares the farm’s production risk and who provides land, labor, management, equipment, or money in line with their share of the farm’s receipts. The monthly payment quantity is the milk marketed that month, but all producers on one dairy operation cannot get payments for more than 2,400,000 pounds in the applicable fiscal-year months. The Secretary will make rules to stop farms from splitting up just to get more money and will use the same tests as the 2001 dairy program to decide what counts as one operation. Payments are made monthly no later than 60 days after the month ends. Signup runs from 60 days after May 13, 2002, through September 30, 2007. Contracts cover production from the first month signed through September 30, 2007, and the Secretary can end or adjust contracts if a producer breaks the rules.