NORWICH – The U.S. Department of Agriculture announced it has made a fiscal contribution to its Milk Income Loss Contract program to help struggling dairy farmers as they battle costly feed prices and low milk prices.

At the end of March, the USDA reported the payment rate for the MILC program was $.3895 per hundredweight during the month of February, which translates to approximately .39 cents per 11.6 gallons of milk produced for dairy farmers. This is the first time the USDA has made a payment for MILC since April 2010.

The MILC program, established by the USDA as part of the 2008 Farm Bill, is designed to assist dairy farmers who lost money during production due to the low price of milk and the high cost of production. In addition to the original milk price, supplemental MILC payments begin when the price of Boston class I milk (milk used for bottling) falls below $16.94/cwt, after adjusting the cost of dairy feed rations. The MILC payments are updated monthly using a financial formula that takes into account the most up-to-date milk price and feed cost.

“Dairy producers are affected by the market price for milk and the price of feed to sustain their herds,” stated USDA Farm Service Agency Administrator Bruce Nelson in a recent press release. “While milk prices have remained above the $16.94 base used in the MILC calculation, the increase in feed prices has triggered payments because of the feed ration component.”