Milk Income Loss Contract Program

To maintain and expand existing markets for dairy which are vital to the welfare of milk producers in the United States.

Payments under this program will be limited to dairy operations that produced milk in the United States and commercially marketed milk during the period of December 1, 2001
through September 30, 2005.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - Consult the local phone directory for location of the nearest county FSA office.

If no listing, contact the appropriate State FSA office listed in the FSA section of Appendix IV of the Catalog, or on the Internet at

Program Accomplishments


Uses and Use Restrictions

Each fiscal year, eligible dairy operations can receive a monthly payment based on monthly milk marketing, up to a maximum of 2.4 million pounds per dairy operation, for the fiscal year.

Dairy operations who make changes to their producer status or who reconstitute their farm operations on or after December 1, 2001 for the sole purpose of receiving additional payments will not be eligible for the benefits under the program implemented by this rule.

Eligibility Requirements

Applicant Eligibility

To be eligible, dairy producers must: (1) have produced milk in the United States and commercially marketed the milk produced anytime during the period of December 1, 2001 through September 30, 2005; (2) enter into a MIL contract during the contract application period; (3) agree to all terms and conditions in the MIL contract and comply with instructions issued by the Commodity Credit Corporation; (4) provide proof of monthly milk production commercially marketed by all persons in the dairy operation during the contract period, to determine the total pounds of milk that will be converted to hundredweight (cwt.) used for payment; (5) submit timely production evidence according to Sec.

1430.209; (6) be actively engaged in the business of producing and marketing agricultural products at the time of signing the MIL contract; (7) in administering this program, the eligibility determination of dairy operation shall be made in the same manner as Dairy Market Loss Assistance (DMLA) contracts in that State; and (8) new MIL contract operations must be unaffiliated with prior DMLA operations.

Beneficiary Eligibility

Eligible dairy producers are those who, beginning December 1, 2001 through September 30, 2005: (1) commercially produce and market cow milk in the United States, or (2) produce milk in the United States and commercially market the milk outside the United States. In addition, dairy producers from a foreign country who have a working visa or other valid taxpayer identification number are eligible for MIL contract benefits.


Before MIL contract payments are issued, all persons involved in a single dairy operation must provide evidence of eligible marketing. Verifiable production evidence can include: (1) milk marketing payment stubs, (2) tank records, (3) milk handler records, (4) daily milk marketing, and (5) copies of any payments received as compensation from other sources.

Aplication and Award Process

Preapplication Coordination


This program is excluded from coverage under E.O.


Application Procedures

To apply for the MIL contract program, dairy operation producers must submit form CCC-580, "Milk Income Loss Contract," to Farm Service Agency (FSA) county office where the dairy operation is located. The CCC-580 must show total pounds of all milk produced and marketed during each month for all persons receiving a share of the marketed milk. Monthly milk production may not be apportioned to circumvent the maximum payment quantity. All persons who share in the risk of a dairy operation's total production must certify information on the CCC-580. FSA will accept only one CCC-580 per operation. When applying for a MIL contract, operators must also have on file: (1) form AD-1026, "Highly Erodible Land Conservation and Wetland Conservation Certification," used to certify understanding of the conservation compliance requirements under USDA programs; and (2) form SF-1199A, "Direct Deposit Sign Up Form," used to sign up for the direct deposit of payments into the payee's account.

Award Procedures

The Price Support Division (PSD) in Washington DC is responsible for the implementation of the MIL contract program in county offices. They will manage the contracts and determine the eligibility of monthly payments for each contract.


Please contact the program contact listed in the Information Contacts section below.


Section 1502 of the Farm Security and Rural Investment Act of 2002, Public Law. 107-171; 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c.

Range of Approval/Disapproval Time

From 1 to 60 days.


Any producer who is dissatisfied with a determination may request reconsideration or appeal of such determination under Part 11 or 780 of 7 CFR Part 1430.


Not applicable.

Assistance Considerations

Formula and Matching Requirements

Payments under this program may be made to dairy operations when the Boston Class I milk price under the applicable Federal milk marketing order is below $16.94 per cwt. No payments will be made to dairy operations for marketing during the months that the Boston Class I milk price under the applicable milk marketing order exceeds $16.94.

Length and Time Phasing of Assistance

Except as provided in Sections 1430.205 and 1430.206, contracts entered into by producers in a dairy operation shall cover eligible production marketed by producers during the period beginning with the first day of the month producers enter into contract and ending on September 30, 2005. If a dairy goes out of business during the contracted period, the MIL contract program will be terminated immediately, except as applicable to earned payments.

Post Assistance Requirements




Recipients under this program are subject to audit by the Office of the Regional Inspector General, USDA.


Producers approved for benefits under this program must maintain accurate records and accounts in order to document that they meet all eligibility requirements specified herein, as may be requested by the Commodity Credit Corporation or the Farm Service Agency. Such records and accounts must be retained for 3 years after the date of payment to the dairy operation under this program. Destruction of the records 3 years after the date of payment shall be the risk of the party undertaking the destruction.

Financial Information

Account Identification



(Direct Payments) FY 07 $330,000,000; FY 08 est not available; and FY 09 est not reported.

Range and Average of Financial Assistance

Not applicable.

Regulations, Guidelines, and Literature

Program is announced through news media and in letters to agricultural producers in the county. Regulations published in the Federal Register, 7 CFR part 1430. MIL Fact Sheet may be located online at

Information Contacts

Regional or Local Office

Consult the local phone directory for location of the nearest county FSA office. If no listing, contact the appropriate State FSA office listed in the FSA section of Appendix IV of the Catalog, or on the Internet at

Headquarters Office

Department of Agriculture, Farm Service Agency, Price Support Division, Stop 0512, 1400 Independence Avenue SW., Washington, DC 20250-0517. Telephone: (202) 720-1919.

Criteria for Selecting Proposals

All producers meeting eligibility requirements may receive assistance. Applications are non-competitive.

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Edited by: Michael Saunders

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