DAIRY PRODUCT EXPORT ASSISTANCE PROGRAM

How it would work: Manufacturers and exporters are paid a bonus, on a bid basis, to export cheese and butterfat to foreign commercial markets.

Program Target: Exporting 130 million pounds of product, consisting of approximately 100 million pounds of commodity cheddar cheese and approximately 30 million pounds of butterfat, on a butter equivalent basis, over 12 month period. This is equivalent to 1.61 billion pounds of milk.

Payment per unit: Average of $0.40 per pound for cheese and $0.65 per pound for butterfat (butter equivalent basis).

Cost for target: $60 million.

Contribution rate for this program: $0.050/cwt. over 12 months, assuming participation by producers representing 70% of U.S. milk production.

Program Considerations:

• The program should focus on assisting dairy product exports to foreign commercial markets for human food use.
• The program should be flexible enough to allow bids for exports for other uses, such as foreign food assistance; however, the criterion for approving bids should be, in all cases, to minimize the cost of exporting the targeted volume of products.
• CWT’s role in managing its export assistance program will consist of evaluating bids, awarding bonuses, and verifying the resulting exports. It will not take ownership or delivery of, nor arrange delivery of any product.

USDA should use the DEIP program to the maximum extent permitted under the WTO for all products, including butterfat. Export assistance activity under the CWT program will be completely independent of USDA’s operation of DEIP.

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