USDA Announces $667 Million Direct Payments to Dairy Farmers
Expansion of Pilot Options Program
H. M. Harris, Jr., Extension Ag. Economist

Persistent low milk prices prompted Congress to allocate nearly $500 million in direct payments to mmilk producers in the recently signed 2000-2001 Agricultural Appropriations Bill. However, the formula under which Congress directed USDA to calculate payments will lead to even higher payments - $667 million.

Many South Carolina farmers will receive the maximum payment of $25,000. The payment rate is $.64/cwt limited to a maximum of 39,000 cwt. Producers who received payments in the past two years will receive payments on 1997 or 1998 production, whichever is higher. No sign-up is required. New producers must wait for details to be released next month.

Secretary of Agriculture Glickman simultaneously announced a major expansion of USDA's Dairy Options Pilot Program from 61 counties to 300 nationwide. The program subsidizes both premiums and brokerage fees for participating producers who use futures and of our counties, Newberry and Orangeburg, rank very close to the top 300. There will be 25 more counties named later for the third signup. I have pressed USDA's Risk Management Agency on this issue for two years because only a handful of eligible counties are in the Southeast. Perhaps producer voices may have more impact on this issue.