A green mold, the Aspergillus fungus, can develop on crops stressed by severe heat and drought. Under the right conditions the mold can produce aflatoxin. It showed up in the Corn Belt on some of the 2012 corn crop where drought was severe.
If cows eat feed made from corn that has aflatoxin, the toxin shows up in milk. The Iowa Department of Agriculture has been testing milk in Iowa since last summer. Contaminated milk must be removed from the market; dairy farmers can't sell it. USDA's Farm Service Agency has a financial assistance program to help dairy farmers deal with losses from aflatoxin contamination. Beth Grabau, public information and outreach specialist at the state FSA office in Des Moines provides the following answers. For more information contact your local FSA office or go to www.fsa.usda.gov/ia.
Question: I'm a dairy farmer worried about aflatoxin levels and the impact it could have on my milk. In the past there was a program to cover this contamination. But with the status of the farm bill, I'm not sure what programs are currently in affect. Is this one of them?
Answer: Yes, the program you refer to still exists. While many of the farm programs in the 2008 Farm Bill have expired as of September 30, 2012, the Dairy Indemnity Payment Program, or DIPP, has been extended through March 27, 2013 by a Continuing Resolution.
Under this program, payments are made to dairy producers who have been directed by a public regulatory agency to remove their raw milk from the commercial market. With the 2012 weather and growing conditions, aflatoxin is the typical contaminator of milk in Iowa. However, the removal of milk from the market can be for other reasons such as contamination by pesticides, nuclear radiation or fallout, or toxic substances and chemical residues other than pesticides.
The regulatory agency for Iowa is the Iowa Department of Agriculture & Land Stewardship, or IDALS, which is responsible for determining the removal and reinstatement of the raw milk. Affected producers can apply at their local FSA office by completing an FSA-373 form by close of business March 27, 2013.
Question: What is the DIPP payment? How is the payment calculated?
Answer: The indemnity payment to a dairy producer is calculated by: number of cows milked multiplied by number of days the milk is off the market, multiplied by average production per cow per day, multiplied by farm price of milk of the same butterfat content as in the base period. The base period used to establish base production is the calendar month, two half-months, or two biweekly pay periods immediately before the milk is removed from commercial market.
Dairy producers can't receive double payments using this program. Producers who receive indemnity payments and then file a successful claim for damages against the party responsible for the contamination must return to FSA within 14 days the lesser of: the amount received from the indemnity payment or the amount received from a claim against the party responsible for the contamination.
Payment of DIPP claims is contingent upon the authority and availability of funds to pay the claims. Claims will be paid from available funds on a first-come, first-serve basis on the date the claim was approved. Approval of the claims will continue until all the funds have been spent. Claims received after the funds have been spent will not be paid.
Question: What type of documentation do I need to provide to my local FSA office?
Answer: As with many FSA programs that are based on production, dairy producers need to provide base period evidence from their milk handler. This will typically be production evidence for the month preceding the milk being dumped or otherwise destroyed. Claim period evidence, or the month the milk was removed from the market, is also needed. FSA will also need some basic information on the milking practices to complete the calculations. This includes number of cows and number of times a day the animals are milked, as well as a statement indicating how the milk became contaminated. The regulatory agency (in Iowa it's IDALS) will need to provide a statement that the milk has been removed from the commercial market. A letter of reinstatement will also be needed.