(a) An MPP-Dairy payment will be made to a participating dairy operation for any consecutive 2-month period when the average actual dairy production margin for the consecutive 2-month period falls below the coverage level threshold in effect for the participating dairy operation.
(b) The MPP-Dairy payment to an eligible participating dairy operation relative to the qualifying 2-month period will equal the product obtained by multiplying:
(1) The amount by which the coverage level in effect for the participating dairy operation exceeds the average actual dairy production margin for the applicable 2-month period;
(2) The coverage percentage in effect for the participating dairy operation; and
(3) The production history of the participating dairy operation, divided by 6.
(c) For any coverage period, a participating dairy operation can for all of its production select only one coverage level threshold between $4 and $8 (in 50 cent increments) per hundredweight under Sec. 1430.107(a)(1); and only one percentage for its production history between 25 percent and 90 percent (in 5 percent increments) under Sec. 1430.107(a)(2).