In February, it had become obvious that high feed costs had eroded dairy profitability to a dangerous level.  Read “Is Wednesday’s gloomy milk-feed ratio even worth considering?”

Now, there is word from the USDA’s Farm Service Agency that February milk production is eligible for nearly 39 cents per hundredweight in Milk Income Loss Contract (MILC) program payments.

The re-appearance of the MILC program means that things have gotten worse. Since April 2010, the MILC program has been dormant because milk prices have generally been high enough to earn producers a profit. But high feed cost has created a situation where another round is needed. 

“While milk prices have remained above the $16.94 base used in the MILC calculation, the increase in feed prices has triggered payments because of the feed ration component,” says FSA Administrator Bruce Nelson.

Eligible producers can receive payment ― $0.3895043 per hundredweight to be exact ― on their full February production, provided that production does not exceed 2.985 million pounds, which is the maximum they are eligible for in the fiscal year that ends Aug. 31.

For more information, contact your FSA county office or USDA service center. Or, go to http://www.fsa.usda.gov/Internet/FSA_File/milc2011.pdf