(a) DPDP purchases commence only if approved by the FSA Administrator under the provisions of this subpart. The FSA Administrator will approve DPDP purchases only if the actual dairy production margin has been $4 or less per cwt for each of the preceding 2 months. The actual dairy production margin will be calculated as specified in Sec. 1430.110. The following chart shows an example of the timing for the determination of DPDP purchases.
DPDP Purchase Determination Example Based on Dairy Production Margins and 3-Month Maximum for Purchases \1\----------------------------------------------------------------------------------------------------------------
If both margins If either margin
Calculate margin below $4 per cwt 3-Month maximum above $4 per cwt
2 Consecutive months for 2 consecutive in the 2 consideration in the 2
months \2\ consecutive months consecutive months----------------------------------------------------------------------------------------------------------------January and February............ March............. Dairy product 1st month of No purchases.
purchases \3\ purchases.
begin in April.February and March.............. April............. Dairy product 2nd consecutive No purchases.
purchases \3\ month of
begin in May. purchases.March and April................. May............... Dairy product 3rd consecutive No purchases.
purchases \3\ month of
begin in June. purchases.April and May................... June \4\.......... No purchases; 3-month maximum No purchases.
terminated after reached (1st
3 consecutive month off).
months.May and June.................... July.............. No purchases; 3-month maximum No purchases.
terminated after reached (2nd
3 consecutive month off).
months.June and July................... August............ No purchases; 3-month maximum No purchases.
terminated after reached (3rd
3 consecutive month off).
months.July and August................. September......... Dairy product 1st month of No purchases.
purchases \3\ purchases.
begin in October.August and September............ October........... Dairy product 2nd consecutive No purchases.
purchases \3\ month of
begin in November. purchases.September and October........... November.......... Dairy product 3rd consecutive No purchases.
purchases \3\ month of
begin in December. purchases.
October and November............ December.......... No purchases; 3-month maximum No purchases.
terminated after reached (1st
3 consecutive month off).
months.November and December........... January........... No purchases; 3-month maximum No purchases
terminated after reached (1st
3 consecutive month off).
months.----------------------------------------------------------------------------------------------------------------\1\ This example assumes that purchases begin in January. In reality, DPDP can--depending on prices and margin
triggers--begin on September 1, 2014, which is the start of MPP-Dairy.\2\ The full month data for a given month is available at the end of the following month. For example, January
data are not available until the end of February.\2\ Purchases cannot begin unless domestic cheddar cheese or nonfat dry milk prices are at certain differentials
relative to world prices.\3\ In the example, June is the 3rd month of consevutive purchases. June would not be calculated as a potential
trigger month, but it is shown on the chart to clearly show the concept of 3 months on and 3 months off for
purchases. If purchases are taking place during a month, that month cannot be used as a trigger month for a
future purchase period.
(b) DPDP purchases terminate and are not reinstated until the condition specified in paragraph (a) of this section is again met, whenever any one of the following occurs:
(1) If purchases were made for the preceding 3 months, even if the actual dairy production margin remains $4 or less per cwt of milk.
(2) If the actual dairy production margin has been greater than $4 per cwt of milk for the immediately preceding month.
(3) If the actual dairy production margin has been $4 or less, but more than $3, per cwt for the immediately preceding month and during the same month --
(i) The price in the United States for cheddar cheese was more than 5 percent above the world price, or
(ii) The price in the United States for non-fat dry milk (NDM) was more than 5 percent above the world price of skim milk powder.
(4) If the actual dairy production margin has been $3 or less per cwt of milk for the immediately preceding month and during the same month --
(i) The price in the United States for cheddar cheese was more than 7 percent above the world price; or
(ii) The price in the United States for NDM was more than 7 percent above the world price of skim milk powder.
(c) Purchases will terminate beginning with the first day of any month that does not qualify for DPDP purchases.
(d) For calculations under paragraphs (b)(3) and (4) of this section, the FSA Administrator may use data from a single or multiple locales or markets, including weighted averages, in consultation with AMS or other USDA agencies.