- Office of U.S. Senator Patrick Leahy -

U.S. SENATOR PATRICK LEAHY

CONTACT: Office of Senator Leahy, 202-224-4242

VERMONT

The following analysis uses USDA data from 2001 and their latest milk production estimates by state to calculate the projected impact on Vermont dairy farmers of the direct dairy payment program in the Farm Bill.

In the new Farm Bill, the rate of payment to dairy farmers throughout the nation is calculated in much the same manner as in our former Dairy Compact. The announced Class I price at Boston is compared with a $16.94 target price and the difference is multiplied by a fixed 45% utilization rate. For example, if the Class I price were announced at $14.94, the difference would therefore be $2.00 per hundredweight. That $2.00 would then be multiplied by 45% to get a $.90 per hundredweight payment rate for all farmers in Vermont and throughout the nation.

Since the bill will not be signed into law until after May 1, 2002 at the earliest, payments in the December 2001 through May 2002 period would likely be considered as part of the retroactive provisions of the bill. As shown in the above table, payments in those six months alone are expected to aggregate to $9.4 million due to the low market prices currently experienced by farmers.

Dairy farmers must sign up with the Farm Service Agency (FSA) of USDA to receive their retroactive and monthly payments. Payments will likely not be available until late summer or fall at the earliest.

Bob Wellington with Agri-Mark Dairy Cooperative provided the above information.