Missouri Dairy Business Update
Volume 2, Number 5
May 2002

National Dairy Market Loss Payments Program
Farm Security and Rural Investment Act of 2002

• A monthly payment will be made to dairy producers whenever the class I price of milk in Boston is below $16.94.
• Boston Class I prices are available at: http://www.fmmone.com/Northeast_Order_Prices/New_Prices_main.htm#Advance
• The payment will be 45% of the difference between $16.94 and the actual Boston Class I price.
• The payment will only be paid on up to 2.4 million pounds of milk produced per dairy operation.
• The program is retroactive to December 2001.
• Expect the first lump sum retroactive payment in early fall, then monthly.
• FAPRI estimates that over the life of the program the payments will average $.89/cwt, but the added milk from dairymen will drop Class III prices by $0.17/cwt and Class IV prices by $0.28/cwt. The net effect for Missouri producers over the life of the program will be an increase of $0.57/cwt for eligible milk production.

Example: Milking approximately 65 head per month

Boston Class I prices are available at: http://www.fmmone.com/Northeast_Order_Prices/New_Prices_main.htm#Advance

Target Price	$16.94
June 2002 Boston Class I Price	- 14.28
Difference equals	2.66
Multiplied by .45	X .45
= Market Loss Payment	1.20/cwt

For the dairyman shipping 100,000 pounds, the monthly check would be $1.20 X 1000 = $1,200.00