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Federal dairy assistance totals $290 million

Financially strapped dairy farmers can draw on a new $290 million assistance program, U.S. Agriculture Secretary Tom Vilsack announced Thursday.

The U.S. Department of Agriculture is implementing the Dairy Economic Loss Assistance Payment -- DELAP -- program has provided under the 2010 agriculture appropriations bill.

"Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times," said Vilsack in a statement. "I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we'll be able to offer them help."

Milk prices plummeted through early to mid 2009, with the national price for milk averaging $16.80 per hundredweight in the fourth quarter of 2008 and averaging $12.23 in the first quarter of 2009, a 27 percent decline, USDA said.

On average, the price U.S. dairy producers received for milk marketed in the summer was about half of what it cost them to produce milk, the agency said.

U.S. Rep. Collin Peterson, DFL-7th District, hailed the move as much needed for dairy farmers who are struggling with a severe economic crisis facing the industry.

"This is an essential stop-gap measure that will help many dairy farmers stay in business in the short-term," Peterson, chairman of the House Agriculture Committee, said in a statement.

"Looking forward, it is obvious that our existing dairy programs are not providing an adequate safety net for dairy farmers, and we need to look at ways we can reform dairy policy to ensure that it provides adequate support for the long term success of the industry," he said. "There are few easy solutions, but I am committed to working with the dairy industry to consider appropriate changes that we can include in the next farm bill."

The program will make a payment to eligible dairy farmers, based on their production and marketing for the months of February through July, Peterson said. Funding for the one-time payments was included in the 2010 agricultural appropriations bill.

"Dairy farmers in Minnesota and across the country continue to struggle from the low dairy prices," said U.S. Sen. Amy Klobuchar, a member of the Senate Agriculture Committee. "Minnesota's farmers are at the heart of our agriculture industry and this program will help dairy farmers get through this rough patch."

The funding comes from an amendment, co-sponsored by Klobuchar, included in the 2010 agricultural appropriations bill that secured $350 million to help struggling dairy farmers. It provides USDA with $290 million in direct support and $60 million in additional funds to enable the USDA to increase the level at which the government buys surplus dairy products off the market, Klobuchar, DFL-Minn., said.

"I have seen firsthand how Minnesota dairy producers have been hit hard by low prices throughout this year," U.S. Sen. Al Franken, DFL-Minn., said in a statement. "This program will assist eligible dairy producers during these tough economic times and help stabilize their operations until prices get better."

Franken, who co-sponsored a dairy price support amendment to the agriculture appropriations bill which provided USDA with $350 million in additional funds to buy surplus dairy products off the market, said it is one way he is working to help Minnesota dairy operators.

In October, he also authored a measure to extend mandatory Country of Origin Labeling to dairy products to give U.S. producers a tool to help them stand out in a crowded marketplace during the current dairy crisis.

To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share:

- Must have produced milk in the U.S. and marketed milk commercially at any time from February through July.

- Must have milk production data for those months.

- Must certify to all milk production produced and marketed by the dairy operation during that time.

The expected payment rate is about 32 cents per hundredweight.