May 2002 DEIP Update:
Dairy Export Incentive Program Reauthorized

The language of the new farm bill authorizes the Dairy Export Incentive Program (DEIP) to continue through September 2007. DEIP uses a bid process to determine awards to be paid to exporters of certain dairy products. The awards, usually paid per metric ton (MT) of product exported, compensate the exporter for the difference between the costs to procure the domestic product and the payment that will be received from the importing country.

Total DEIP tonnage is subject to limitations under the World Trade Organization's (WTO) agreements on domestic subsidization. Congress authorized the program to the full extent of these WTO limits. The United States has been at the WTO limit since fiscal year 2000, so the DEIP quantity allocations for FY 2003 will remain the same as FY 2002: cheese at 3,030 MT; butterfat at 21,097 MT; and nonfat dry milk (NFDM) at 68,201 MT.

Because butter was in tight supply, only the cheese and NFDM allocations were filled in the current DEIP year (FY 2002). The current DEIP program year runs from July 2001 to June 2002. ###

Posted May 6, 2002