Dairy Farm Sustainability Act of 2018

To amend the Agricultural Act of 2014 to establish the Dairy Farm Sustainability Price Loss Coverage Program, and for other purposes. 1. Short title This Act may be cited as the Dairy Farm Sustainability Act of 2018 2. Dairy Farm Sustainability Price Loss Coverage Program Part I of subtitle D of title I of the Agricultural Act of 2014 is amended by inserting after section 1408 ( 7 U.S.C. 9058 1408A. Dairy Farm Sustainability Price Loss Coverage Program (a) Definitions In this section: (1) Contracting dairy operation The term contracting dairy operation (2) Minimum milk price The term minimum milk price (3) Payment quantity The term payment quantity (b) Contracts (1) In general The Secretary shall offer to enter into a contract with a participating dairy operation under which the participating dairy operation may receive payments under subsection (c). (2) Signup The Secretary shall offer to enter into contracts under paragraph (1) during the period that a dairy operation may register to participate in the margin protection program established under section 1404(b). (3) Duration of contracts (A) In general Except as provided in subparagraph (B), a contract entered into under paragraph (1) shall cover milk marketed by the contracting dairy operation during the period beginning on the first day of the month during which the contract is entered into and ending on December 31, 2023. (B) Violations If a contracting dairy operation violates a contract entered into under paragraph (1), the Secretary may— (i) terminate the contract and allow the contracting dairy operation to retain any payments received under the contract; or (ii) allow the contract to remain in effect and require the contracting dairy operation to repay a portion of the payments received under the contract, based on the severity of the violation. (c) Payments (1) In general The Secretary shall provide to a contracting dairy operation a payment for a month under this subsection and not under the margin protection program if the amount of the payment to the contracting dairy operation for that month under this section is greater than the amount that the contracting dairy operation would receive under the margin protection program. (2) Amount The amount of a payment to a contracting dairy operation under this subsection shall be equal to the product obtained by multiplying, as determined by the Secretary— (A) the payment quantity during the applicable month; (B) the difference obtained by subtracting— (i) the minimum milk price; and (ii) the All Milk (C) 45 percent. (3) Payment quantity (A) In general Subject to subparagraph (B), the payment quantity for a contracting dairy operation for a month shall be equal to the hundredweight of milk marketed by the contracting dairy operation during the month. (B) Limitation The payment quantity described in subparagraph (A) for any month for a contracting dairy operation shall not exceed 4,166 hundredweight of milk. (4) Timing of payments The Secretary shall make a payment to a contracting dairy operation under this subsection not later than 60 days after the last day of the month for which the payment is made. . 3. Extension of margin protection program for dairy producers Section 1409 of the Agricultural Act of 2014 ( 7 U.S.C. 9059 2018 2023

Summary: Dairy Farm Sustainability Act of 2018 This bill amends the Agricultural Act of 2014 to establish a Dairy Farm Sustainability Price Loss Coverage Program. Dairy operations that enter into contracts under the program are eligible to receive payments from the Department of Agriculture (USDA) when milk prices fall below the minimum milk price. The bill specifies that the minimum milk price is $23.34 per hundredweight of milk and requires USDA to adjust the limit for inflation for each half of each calendar year. The bill also reauthorizes the existing Dairy Margin Protection Program through 2023. (The program is a voluntary program that makes payments to participating dairy operations when a formula-based national margin [the difference between the national all milk price and the national average feed cost] falls below a producer-selected insured margin.)