HOW ARE PAYMENTS CALCULATED?
The amount of money from USDA due to a cooperative is determined by the volume of the cooperative’s milk regulated by the FMMO during July to December 2020. The monthly payment rate during that time is 80 percent of the difference between the previous and the current Class I price formulas. Because prices change every month and there are 11 FMMOs, USDA is using 66 different payment calculation rates to determine how much money is due to producers.
Many variables affect an individual producer’s actual payment. A program-wide, uniform producer payment rate is impossible because so many variables go into a producer’s payment. And significantly, eligible milk per producer or farm entity is limited to 5 million pounds of milk marketed, or 833,000 pounds per month during the period of July through December 2020. Milk produced beyond this cap is not eligible for payment. Other variables include:
- Total pounds of pooled milk
- Producer AGI eligibility
- Producer participation declination
- Applicable Order-specific monthly rate
- How a cooperative originally paid its producers
USDA is working closely with cooperatives and other handlers to determine producer payments based on the factors described above. In addition, USDA will verify that each handler made producer payments correctly.
HOW AND WHEN WILL MONEY BE DISTRIBUTED?
USDA is establishing individual agreements with cooperatives and other handlers, who are responsible for paying dairy farmers. Once a handler receives their PMVAP payment from USDA, they have 30 days to disburse monies to producers. USDA anticipates that eligible dairy farmers will receive PMVAP payments during the first quarter of 2022.
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