Dairy Farm Sustainability Act of 2018

“1408A. Dairy Farm Sustainability Price Loss Coverage Program

“(a) Definitions—In this section:

“(1) Contracting dairy operation—The term contracting dairy operation means a participating dairy operation that enters into a contract under subsection (b)(1).

“(2) Minimum milk price—The term minimum milk price means $23.34 per hundredweight of milk, as adjusted by the Secretary for each half of each calendar year to reflect changes in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.

“(3) Payment quantity—The term payment quantity means the payment quantity established for a contracting dairy operation under subsection (c)(3).

“(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” price per hundredweight under the applicable Federal milk marketing order; and

“(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.”