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DEIP Update, June 2003: USDA Moves More Butter The U.S. Department of Agriculture (USDA) took additional steps May 29 to remove more butter from the domestic market through the Dairy Export Incentive Program (DEIP). Two awards were issued to pay $1,975 per metric ton (approximately $0.90 per pound) to two companies that will sell anhydrous milkfat (a product containing a higher concentration of butterfat than butter) into the Caribbean, Central and South American region. Through DEIP, contracts are awarded to exporters to sell an allotment of product for an agreed-upon subsidy.With the DEIP year running from July 1 to June 30, the year-to-date total butter equivalent of DEIP butterfat awards is now 6,875 MT. This total is a dramatic increase from zero over the preceding two program years. Future awards may be in the works, but it is unlikely that USDA will exhaust its butterfat export subsidy capabilities this program year. USDA is limited by World Trade Organization agreements to no more than 21,097 MT of butterfat export subsidies. USDA has said it may award as much as 10,000 MT for the program year. Posted June 9, 2003
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