(iii) contributes land, labor, manage-
ment, equipment, or capital to the dairy 
operation. 
(B) 
ADDITIONAL
OWNERSHIP
STRUC-
TURES.—The Secretary shall determine addi-
tional ownership structures to be covered by the 
definition of dairy operation. 
(8) HANDLER.— 
(A) IN
GENERAL.—The term ‘‘handler’’ 
means the initial individual or entity making 
payment to a dairy operation for milk produced 
in the United States and marketed for commer-
cial use. 
(B) PRODUCER-HANDLER.—The term in-
cludes a ‘‘producer-handler’’ when the producer 
satisfies the definition in subparagraph (A). 
(9) PARTICIPATING
DAIRY
OPERATION.—The 
term ‘‘participating dairy operation’’ means a dairy 
operation that— 
(A) signs up under section 1412 to partici-
pate in the production margin protection pro-
gram under subpart A; and 
(B) as a result, also participates in the sta-
bilization program under subpart B. 
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(10) PRODUCTION MARGIN PROTECTION PRO-
GRAM.—The term ‘‘production margin protection 
program’’ means the dairy production margin pro-
tection program required by subpart A. 
(11) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Agriculture. 
(12) 
STABILIZATION
PROGRAM.—The 
term 
‘‘stabilization program’’ means the dairy market sta-
bilization program required by subpart B for all par-
ticipating dairy operations. 
(13) STABILIZATION
PROGRAM
BASE.—The 
term ‘‘stabilization program base’’, with respect to a 
participating dairy operation, means the stabilization 
program base calculated for the participating dairy 
operation under section 1431(b). 
(14) UNITED
STATES.—The term ‘‘United 
States’’, in a geographical sense, means the 50 
States, the District of Columbia, American Samoa, 
Guam, the Commonwealth of the Northern Mariana 
Islands, the Commonwealth of Puerto Rico, the Vir-
gin Islands of the United States, and any other ter-
ritory or possession of the United States. 
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SEC. 1402. CALCULATION OF AVERAGE FEED COST AND AC-
TUAL DAIRY PRODUCTION MARGINS. 
(a) CALCULATION OF AVERAGE FEED COST.—The 
Secretary shall calculate the national average feed cost for 
each month using the following data: 
(1) The price of corn for a month shall be the 
price received during that month by farmers in the 
United States for corn, as reported in the monthly 
Agricultural Prices report by the Secretary. 
(2) The price of soybean meal for a month shall 
be the central Illinois price for soybean meal, as re-
ported in the Market News–Monthly Soybean Meal 
Price Report by the Secretary. 
(3) The price of alfalfa hay for a month shall 
be the price received during that month by farmers 
in the United States for alfalfa hay, as reported in 
the monthly Agricultural Prices report by the Sec-
retary. 
(b) CALCULATION OF ACTUAL DAIRY PRODUCTION 
MARGINS.— 
(1) PRODUCTION
MARGIN
PROTECTION
PRO-
GRAM.—For use in the production margin protection 
program under subpart A, the Secretary shall cal-
culate the actual dairy production margin for each 
consecutive 2-month period by subtracting— 
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(A) the average feed cost for that consecu-
tive 2-month period, determined in accordance 
with subsection (a); from 
(B) the all-milk price for that consecutive 
2-month period. 
(2) STABILIZATION PROGRAM.—For use in the 
stabilization program under subpart B, the Sec-
retary shall calculate each month the actual dairy 
production margin for the preceding month by sub-
tracting— 
(A) the average feed cost for that pre-
ceding month, determined in accordance with 
subsection (a); from 
(B) the all-milk price for that preceding 
month. 
(3) TIME
FOR
CALCULATIONS.—The calcula-
tions required by paragraphs (1) and (2) shall be 
made as soon as practicable using the full month 
price of the applicable reference month. 
Subpart A—Dairy Production Margin Protection 
Program 
SEC. 1411. ESTABLISHMENT OF DAIRY PRODUCTION MAR-
GIN PROTECTION PROGRAM. 
Effective not later than 120 days after the effective 
date of this subtitle, the Secretary shall establish and ad-
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minister a dairy production margin protection program 
under which participating dairy operations are paid— 
(1) basic production margin protection program 
payments under section 1414 when actual dairy pro-
duction margins are less than the threshold levels 
for such payments; and 
(2) supplemental production margin protection 
program payments under section 1415 if purchased 
by a participating dairy operation. 
SEC. 1412. PARTICIPATION OF DAIRY OPERATIONS IN PRO-
DUCTION MARGIN PROTECTION PROGRAM. 
(a) ELIGIBILITY.—All dairy operations in the United 
States shall be eligible to participate in the production 
margin protection program, except that a participating 
dairy operation shall be required to register with the Sec-
retary before the participating dairy operation may re-
ceive— 
(1) basic production margin protection program 
payments under section 1414; and 
(2) if the participating dairy operation pur-
chases supplemental production margin protection 
under section 1415, supplemental production margin 
protection program payments under such section. 
(b) REGISTRATION PROCESS.— 
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(1) IN GENERAL.—The Secretary shall specify 
the manner and form by which a participating dairy 
operation may register to participate in the produc-
tion margin protection program. 
(2) TREATMENT
OF
MULTIPRODUCER
DAIRY 
OPERATIONS.—If a participating dairy operation is 
operated by more than 1 dairy producer, all of the 
dairy producers of the participating dairy operation 
shall be treated as a single dairy operation for pur-
poses of— 
(A) registration to receive basic production 
margin protection and election to purchase sup-
plemental production margin protection; 
(B) payment of the participation fee under 
subsection (d) and producer premiums under 
section 1415; and 
(C) participation in the stabilization pro-
gram under subtitle B. 
(3) TREATMENT
OF
PRODUCERS
WITH
MUL-
TIPLE DAIRY OPERATIONS.—If a dairy producer op-
erates 2 or more dairy operations, each dairy oper-
ation of the producer shall separately register to re-
ceive basic production margin protection and pur-
chase supplemental production margin protection 
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