2002 Farm Bill Information

2002 Farm Bill Information for Dairy Producers

All content provided below is available from
the USDA Farm Services Agency website

FSA New Mexico Enrollment Report: view enrollments by New Mexico county.


Milk Income Loss Contract (MILC) Program Farm Service Agency's (FSA) Milk Income Loss Contract (MILC) Program financially compensates dairy producers when domestic milk prices fall below a specified level. The program is authorized by the 2002 Farm Bill and has no set funding level. Click here for more information>>

Frequenty Asked Questions about dairy-related issues
in the 2002 Farm Bill (Title 1, Subtitle E)

Question (click a question for the answer)
What forms are required for participating in the MILC program and how often must they be completed?

Are any states or areas excluded from the MILC program?

Since the 2002 Farm Bill states the MILC program is available to all farmers without restriction, how can FSA require a conservation plan on a farm? Must producers comply to participate in the MILC program?

Other than the 2.4 million pound limitation, is there a dollar limitation for the MILC program?

Are there rules that prevent large producers from splitting up their production to receive larger MILC payments?

To speed up processing, can FSA use USDA Agriculture Marketing Service's records of milk produced by a dairy operation?

Can FSA hold MILC payments because the dairy producer owes the federal government for back taxes, fines, or delinquent loans?

What are the steps in becoming a MILC agent?

Can the president of a dairy operation corporation sign Form CCC-580 as the participating producer, or must the signature of all the shareholders be submitted?

How and where do dairy producers sign up for the MILC program?

Is there a per pound cap on payments to dairy farmers for milk produced between December 2001 and the time they enter a MILC contract?

What is the maximum cap per farm operation that can be collected, or is there no cap? For example, if prices go to $6.00/100, would the payments be calculated as follows: $16.94-$6.00=$10.94 $10.94x.45= $4.923 $4.923/100x2.4M=$118,152

Can partners on the same dairy operation each receive a MILC payment, doubling the benefit as long as they remain under the poundage cap?

Will producers receive their MILC checks the same time each month?

How will producers know when the milk price is below $16.94 in Boston?

For the MILC program, how often must milk poundage be reported and to whom?

Can a dairy operator receive MILC payments on more than one operation?

Who qualifies for the MILC program?

Must a dairy farmer currently produce milk in order to qualify for MILC assistance?

I understand that the Class I milk price will be figured by the Boston price, but how will the percent on the total milk check that is Class I be figured?

Is the $20,000 payment limitation per producer based on the Class I price at Boston?

Will qualifying dairy producers only receive MILC payments for their Class 1 milk, or does the program apply to the other classes?

What are the payment limitation and eligibility rules for the MILC program?

Are new dairy operations eligible for the MILC program, or only those already in existence?

Are farmers who sold their dairy herd before MILC funds became available still eligible to receive payments for the months that they milked?

What is the Boston Class I price, how is it determined, and how does it fluctuate?

How was the $16.94 figure determined?

What percentage of total milk is considered Class I in the Pacific Northwest Federal Milk Marketing Order?

How much Class I milk will be subsidized per producer?

How much were butter and nonfat dry milk purchase prices changed in November 2002 and will USDA purchases change because of this?

What other USDA programs are affected by the November 2002 nonfat dry milk purchase price decline?

What is the Milk Income Loss Contract (MILC) program?

Why did USDA change dairy product purchase prices in November 2002?

Will the November 2002 nonfat dry milk purchase price decline have any impact on dairy product imports?

Besides administering the MILC program and purchasing dairy surpluses, how else does USDA assist dairy producers?

How will USDA surpluses of nonfat dry milk help revitalize the domestic casein industry?

How are USDA surpluses of nonfat dry milk used in the production of cattle feed?

Will MILC payments be issued monthly or in a lump sum?

Can producers choose payment months or receive payments on part of their production?

Can't dairy processors let the milk price drop and have the government pick up the difference?

What are the past milk payment rate amounts?

What authority does USDA have to change dairy product purchase prices?

How much nonfat dry milk does USDA have in storage? What is the cost to purchase and maintain it?

What is USDA doing with its inventory of nonfat dry milk?

What factors have caused USDA to obtain large surpluses of nonfat dry milk?

Is USDA required to purchase nonfat dairy products at the lowest cost?

Can USDA process stocks of nonfat dry milk into other products?

Will Class II, III, and IV milk be paid when Class I milk price falls under $16.94?

How will the 2.4 million pound production cap be applied in the Milk Income Loss Contract Program?

When will the transition payments be made?

How will market loss payments work for dairy regarding volume limitations?

Can USDA alter the rate of price support between butter and nonfat dry milk?

Instead of paying cash to processing companies, can USDA pay them with additional volumes of nonfat dry milk?

Can USDA purchase other surplus milk products besides nonfat dry milk?

What is the break-even point in avoiding nonfat dry milk storage costs?

How does USDA support the price of nonfat dry milk?

Does the dairy direct payment count towards a producer's $40,000 limit if the producer is receiving payment for grain farming?

How can dairy farmers make comments on the new National Dairy Program?

How will the marketing year be defined?

Will each partner or shareholder in a dairy operation have an individual cap?

Must dairy producers visit their local FSA office each month for the next three years in order to apply for dairy benefits?

Are there provisions for manure cleanup and storage in dairy operations?

Will dairy farmers receive payments under the dairy market loss payment program for low prices of 2002?


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FAQ Legal Disclaimer: The following questions and answers are not intended to be definitive interpretations of farm legislation. Rather, they are preliminary and non-binding. To the extent that they interpret or construe new legislation, those interpretations and constructions are subject to change as the Department develops implementing policies and procedures. Any person's attempted reliance on these kinds of preliminary statements would be at that person's risk.