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DEIP Update, March 17, 2003: Program Continues Flurry of Activity The U.S. Department of Agriculture's (USDA) Dairy Export Incentive Program (DEIP) continues to be very active. As reported earlier in News Update, USDA announced new allocations and invitations for bids for nonfat dry milk (NFDM), cheese and butterfat in late February. Since that announcement, all of those invited allocations have been filled. As a result, the entire annual allocation of nonfat dry milk (NFDM) has been awarded and only one metric ton of the cheese allocation remains. On butterfat, USDA has invited and filled bids on 5,000 metric tons of the 13,186 MT it allocated earlier in the fiscal year.The DEIP process begins with announcements from USDA indicating the amount - typically 100% of the WTO allowable limit -- that is available under the program, and any quantity limits by region of the world. Then, USDA posts an invitation for bids, including the bonus (subsidy per metric ton of product) necessary to compensate the exporting bidder for costs to procure and deliver domestic dairy products to a foreign port above the price received for that product. After bonuses are awarded, USDA monitors the activity of the successful bidders; any product shipments that aren't fulfilled within their contracted time period are forfeited and may be re-bid. Table 1 below summarizes the program activity so far this DEIP fiscal year, which began July 1, 2002. Table 2 provides more details regarding DEIP awards.
Posted March 17, 2003
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