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September 2002 DEIP Update: USDA Announces Partial Allocations On September 13, the Dairy Export Incentive Program (DEIP) came out of suspended animation when the U.S. Department of Agriculture (USDA) announced partial allocations for the 2002-2003 trading year. The DEIP fiscal year began on July 1, but the program could not actually launch until USDA officially announced DEIP allocations. In previous years, USDA announced product allocations under DEIP all at one time for the full volume allowed under U.S. agreements during the World Trade Organization’s Uruguay Round. That was not the case this year. USDA announced initial allocations as: 17,050 metric tons (MT) of nonfat dry milk (NFDM), 5,274 MT of butterfat, and 757 MT of various cheeses. These amounts represent just 25% of the allowable Uruguay Round limits.In its September 13 announcement, USDA stated that it intends to allocate the full amounts by June 30, 2003, but will do so in successive announcements "to better manage the DEIP throughout the year." DEIP invites exporters to bid for bonuses on shipments of the specified dairy products. These bonuses compensate exporters for costs of procurement and market price shortfalls that might otherwise preclude the export of U.S. dairy products. Now that USDA has issued partial allocations, the next step is for USDA’s Foreign Agriculture Service (FAS) to release an invitation for bids. These invitations specify the qualifying regions for participation in the program and other procedural details of the program. September 16, 2002
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