The Dairy Product Donation Program is designed to help margins recover when they drop below the catastrophic level of $4 per hundredweight. It requires USDA to purchase consumer-ready dairy products for distribution through low-income feeding programs.
If margins fall below $4 per hundredweight for any two consecutive months, the Agriculture Department will publish a list of consumer-ready dairy products to be purchased at market prices for one month. Purchased items will be donated to food banks and other low-income feeding programs. USDA will purchase dairy products for three months, unless margins rebound above $4 sooner. Each instance of low margins will trigger a specific set of products to be purchased. Products will include both those that will help increase farmers’ margins and those needed by food banks.
To protect exports, the program will end if U.S. prices exceed international prices by more than five percent or seven percent, depending on margin levels.USDA cannot store the dairy products it purchases, and organizations receiving the products are prohibited from selling them back into commercial markets.