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September 4, 2003

MILC program signup date approaches

WEST LAFAYETTE, Ind. – Many dairy producers have until Sept. 15 to decide when to start Milk Income Loss Contract (MILC) program payments for 2004, said Mike Schutz, a Purdue University Cooperative Extension Service dairy specialist.

"If producers are interested in changing their start date for the MILC program, they need to do that by Sept. 15 if October was their starting month last year," Schutz said.

Producers who did not begin payments in October can updatemove their starting month to the 15th of the month before their original starting date. "If a producer chose to start program payments in January last year, his or her deadline is Dec. 15," Schutz said.

The MILC program is a counter-cyclical price support system included in the 2002 Farm Bill for fluid milk. Payments are 45 percent of the difference between the current Boston Class I milk price and $16.94 per hundredweight, Schutz said.

There is some strategy to choosing a starting month because dairies only receive payments on the first 2.4 million pounds of milk produced during a four-month period. Larger dairies may produce that much in one month, Schutz said.

Milk prices are generally lower in January and February, so it's usually better for producers to begin payments during those months to get the most support for their milk, Schutz said.

"Some dairies will have to really take a close look and try to estimate when they think the optimum month will be," he said. "For example, for a dairy farm of about 200 cows, if you take into consideration the milk prices from the Chicago Mercantile Exchange futures, it looks like the optimum months for a 200 cow herd would be January through June."

A program payment calculator is available through University of Wisconsin Extension. A link to the calculator is located on the Purdue Extension dairy Web page under MILC payment estimates.

To sign up for the programchange start dates for the program, producers should contact their local Farm Service Agency office. Additional information about the program is available through the FSA Web site.

Writer: Kay Hagen, (765) 494-6682, kjh@purdue.edu

Source: Mike Schutz, (765) 494-9478, mschutz@purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/


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