Before you go to the local Farm Service Agency office to sign up for the Market Income Loss Contract program arm yourself with information.
The following web sites can help you do just that. The first site is the announcement of the program and contains all the rules you must follow. ftp://ftp.fsa.usda.gov/public/notices/ld_524.pdf
This site gives you an example contract so that you can see what is required. http://forms.sc.egov.usda.gov/eforms/Forms/CCC0580.pdf
The other thing you’ll want to know before you go to sign up is the payment price for each month. The list below, as calculated by Bob Cropp, extension dairy economist at the University of Wisconsin includes the calculated prices for December 2001 through August 2002 with an estimate for September 2002.
September –$1.00 - $1.10/hundredweight
And for those of you who are interested in the historical Class I price in Boston , you can check out this web site: www.fmmone.com
One last bit of useful information is how the payment is calculated. Whenever the Class I price for Boston, Mass., drops below a target price of $16.94 per hundredweight you will receive a payment that is equal to 45 percent of that difference.
To determine the pay rate for a month you must first calculate the Class I price for Boston. Take whichever is higher, the announced advanced Class III or Class IV price, and add $3.25 to it. $3.25 is the differential for the federal order in Boston. In August, Class IV was the higher of the two so the calculation would be:
$10.48 + $3.25 = $13.73.
Now, take the target price of $16.94 - $13.73 = $3.21. Multiply that by 45 percent and you get a payment of $1.44 per hundredweight.