Dairy Disaster Assistance Payment Program

1
Dairy Disaster Assistance Payment Program

• DDAP-III

2
Estimated Base Year Production

• Determined based on NASS data
• For milk production per cow
• In the State in where disaster county is located
• During the applicable base period.

3
Calculating Base Year Production

• Base year production is calculated by taking
• average number of cows in the operations herd
  during the applicable base period
• Multiplied by (X)
• Applicable NASS State average

4
Determination of Losses

• Losses are determined according to the following
• Actual marketed production
• (-) Minus
• Estimated base year production
• () Equals Loss

5
Loss Adjustments

• COC may make adjustments to production losses
  to the extent the reduction in production is
• Not certified by producer to be disaster-related
• Determined by FSA to not be disaster-related

6
Loss Adjustment Calculation

• Production adjustments are calculated by
• Determining number of ineligible cows per month
• (x) Multiplied by
• Milk produced per cow according to NASS data
• () Equals production adjustment
• If NASS data for State is unavailable, the
  annual State average will be divided by 12 for a
  monthly value

7
Loss Adjustment for Dairys No Longer in Business

• Dairies that do not resume operation during the
  applicable claim period are only eligible for
  benefits through the end of the last month the
  operation commercially marketed milk.
• Production for the average number of cows for
  ineligible months must be
• Adjusted from the estimated base production to
  not calculate as a loss
• Recorded on FSA-747, Part D, Item 8

8
Example of Adjustment for Dairies No Longer in
Business

• ABC Dairy operation went out of business in Sep
  05 after the hurricane. The operation maintained
  an average of 100 cows during 2005.
• An entry of 100 should be made in Part D item
  8 for the months of Oct thru Dec to account for
  the production from those cows that will be
  subtracted from the calculated loss.

100
100
100
9
Payment Rates

• Payment rates for production losses are based on
  the average mailbox milk price according to the
  applicable State Marketing Orders where the
  eligible disaster county is located, during the
  eligible period.
• Payment rates for unregulated States have been
  determined based on a contiguous or nearby
  States mailbox price

10
Calculating Payment

• Calculated by taking
• The applicable payment rate
• (x) Multiplied by
• Dairy operations total eligible loss
• () Equals Loss quantity
• (-) minus
• Production adjustments
• Amounts received for the same loss from other
  DDAP programs for the same period

11
Determining Payment Method

• If at the conclusion of signup the total value
  of eligible losses
• does NOT exceed the available funding, less any
  reserve payments will be issued at the maximum
  payment rate.
• exceeds the available funding at the maximum
  payment rates, payments will be made according to
  an alternative payment method.

12
Alternative Payment Method

• DDAP-III benefits will be based on a 20 loss
  threshold of the total estimated base period
  production for each applicable claim period.

13
Loss Threshold Example

• 620,000 (total est. base period production)
• -485,000 (actual marketed production)
• 135,000 (total eligible loss)
• 620,000 x 20 124,000
• 135,000 -124,000 11,000

Calculation results in losses equal to or less
than 20 paid at a factored rate
Calculation results in losses above 20 paid at
maximum payment rate
14
95 Percent Cap

• Total assistance may not exceed 95 of what the
  value of the production would have been in the
  absence of a loss.
• Total assistance includes
• Example
• DDAP-III payment 19,488
• Value of production not lost 277,600
• 297,088

15
95 Percent Cap Calculation

• 95 cap is calculated by multiplying
• Example
• Operations cows, times 100 cows
• Annual NASS for State, times 21,404/cow (CA)
• Mailbox price, times 0.1388 (CA/05)
• 95 percent 282,233

16
Applying the 95 Cap

• Example
• Total calculated assistance 297,088
• (DDAP-III payment Production)
• 95 Cap 282,233
• Amount above cap 14,855

17
Net Payment After 95 Cap

• Example
• DDAP-III Payment 19,488
• Exceeds cap - 14,855
• Net Payment Due 4,633

18
Payment Provisions

• APPLICABLE
• Offset
• Assignment
• Withholding
• PPI
• Direct deposit

• NOT APPLICABLE
• Gross revenue
• Production limit
• Advance payment