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Federal Register / Vol. 86, No. 236 / Monday, December 13, 2021 / Rules and Regulations
payments on supplemental pounds of milk marketings. The supplemental production history is determined by multiplying 75 percent of the result of subtracting the dairy operations established production history from their actual milk marketings for the 2019 calendar year; calculated as follows:
2019 milk marketingsproduction history 75%
A participating dairy operation with approved supplemental pounds will have the same coverage percentage and level as on the DMC contract for the applicable calendar year. DMC
indemnity payments will be issued according to the corresponding coverage levels for both established production history and supplemental pounds.
The sum of the pounds covered by supplemental DMC and the established production history cannot exceed 5
million pounds. The total covered production history is determined by the coverage percentage multiplied by the sum of supplemental production history and the existing DMC production history.
Supplemental production premium fees are determined using the Tier 1
premium rate and the supplemental production history to ensure that the total covered production history does not exceed 5 million pounds. Tier 1
premium rates are specified in 7 CFR
1430.407. Dairy operations enrolled in multi-year lock-in contracts are not eligible for the premium discount on supplemental pounds. Multi-year lockin contracts will pay the standard premium rate by coverage level on supplemental production history. When a dairy operation with a multi-year lockin contract enrolls supplemental production history, the supplemental history is enrolled up to and including the 2023 coverage year.
FSA will announce by press release and external communications a 45-day or more special enrollment or coverage election period for participating dairy operations to establish supplemental production history. When supplemental production history is established, dairy operations are required to cover the pounds of established production history and supplemental production history. Dairy operations not enrolled for 2021 DMC cannot enroll during the supplemental special enrollment.
Eligible dairy operations for supplemental production history once enrolled and approved may receive applicable indemnity starting in January of 2021 through December 2023. For dairy operations where a succession-ininterest occurred or occurs on or after
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January 2, 2021, through the special enrollment opening, the predecessor must establish supplemental history for the successor to be eligible for 2021
supplemental DMC coverage because the predecessor originally established the production history. The successor will only be eligible for the days in 2021
in which they succeeded to the dairy operation. The successor will not be eligible for 2021 supplemental coverage if the predecessor does not establish supplemental production history.
Otherwise, supplemental production history established by a successor during the same period will not be effective until the 2022 coverage year.
To accurately reflect dairy operation feed costs, the rule will amend the calculation of average feed cost and actual dairy production margins by determining the price for alfalfa by using the price for high quality hay. The previous rule used an average of high quality premium and supreme alfalfa hay and average quality hay to calculate the hay price according to 7 CFR
1430.411c3. USDA is making this change retroactive to the beginning of the 2020 program year, as a discretionary change.
Dairy Indemnity Payment Program As codified in 7 U.S.C. 4551, the Secretary of Agriculture is authorized to indemnify affected farmers and manufacturers of dairy products who, through no fault of their own, suffer income losses with respect to milk or milk products containing harmful pesticide residues, chemicals, or toxic substances, or that were contaminated by nuclear radiation or fallout. DIPP was originally authorized by section 3 of Public Law 90484, and was amended by section 1402b of the 2018 Farm Bill, extending the authority for DIPP until September 30, 2023.
This rule amends the regulations in 7
CFR part 760 to indemnify affected farmers for depopulating and permanently removing cows in certain situations as explained in this section.
This rule is also amending the amount of time a dairy is eligible to receive indemnification for milk under DIPP.
Both changes are discretionary.
For certain affected farmers, elevated levels of perfluoroalkyl and polyfluoroalkyl substances PFAS
chemical residues in their dairy cows has led to extended participation in DIPP, resulting in the need to consider an appropriate change under DIPP to better address these circumstances.
Because efforts to investigate and address PFAS by the Federal government are ongoing and additional studies are needed to understand how to
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significantly reduce accumulated PFAS
levels in dairy cows, affected cows may be determined likely to be not marketable for a lengthy duration.
Currently the science related to PFAS is evolving. FSA carefully considered the circumstances and determined that in cases where dairy cows are likely to be not marketable for a lengthy duration, as determined by the Deputy Administrator for Farm Programs DAFP, the affected cows would be eligible for depopulation. The potential increase in these situations requires this change in DIPP policy for contaminated milk and other similar events resulting in milk and cows that are likely to be not marketable for longer durations.
Therefore, the amended rule:
Limits indemnification of milk due to chemical residues to 3 months to monitor chemical levels, unless an extension is approved, removing the cows from milk production during that time; and provides indemnification of the cows through DIPP where the cows are likely to be not marketable for 3 months or longer from the date the affected farmer submits an application for cow indemnification per 7 CFR 760.13.
Changing the DIPP regulations to allow for the indemnification of affected cows from the same loss 1 will eliminate the potential for continued and prolonged months of milk indemnification and in most cases reduce the overall expense to the government and producer. The DIPP
statute authorized the Secretary to make indemnity payments for cows or milk but USDA has not previously implemented regulations for the indemnification of cows. The term of DIPP milk eligibility is changing in this rule to limit indemnification for contaminated milk due to the same loss to 3 months, unless an extension is approved. An extension may be granted if, upon request from an affected farmer and at the discretion of DAFP, DAFP
approves additional months of milk indemnity payments to allow additional time for planning for removal depopulation and disposal, and public agency approval of such plan, required for cow indemnification or in circumstances where chemical residues are anticipated to be reduced to marketable levels according to a plan 1 As defined in 760.2, same loss means the event or trigger that caused the milk to be removed from the commercial market. For example, if milk is contaminated, the original cause of the contamination was the trigger and any loss related to that contamination would be considered the same loss. An example of a cause of contamination would be contaminated water from a specific well or feed grown on certain fields.

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