USDA announced the February Milk Income Loss Contract (MILC) payment rate will be $1.51/cwt, adjusted for a national average dairy feed price of $7.73/cwt. Without the feed adjustment, the February MILC payment would have been $1.34/cwt. For more information, go to: www.fsa.usda.gov/FSA/webapp
Based on February's estimated U.S. milk production of 14.745 billion lb., the MILC payments could pump some $220 million into the nation's dairy industry. That's assuming all producers signed up for MILC payments starting in February. MILC payments should start flowing into producers' checking accounts this week.
The MILC payment is based on an adjusted trigger lever of $17.33/cwt (the $16.94/cwt Boston Class I trigger plus the feed adjuster). The actual Class I price in Boston was $13.97. (Note the difference between the trigger and the actual Class I price is then multiplied by 45% to get the actual payment rate.)
The March MILC payment will be at least $1.92/cwt and the April MILC will be at least $1.50/cwt. Preliminary feed prices for March are $3.96/bu for corn, $9.13/bu for soybeans and $137/ton for alfalfa, suggesting a feed adjustment rate of $7.63. If those prices hold, the March MILC payment will be about $2.04/cwt.