DEIP Update, December 2003: Program Hibernation since August

The U.S. Department of Agriculture's (USDA) Dairy Export Incentive Program (DEIP) has seen no activity since August 2003.

For the current DEIP fiscal year, which began on July 1, 2003, USDA previously announced partial allocations for all three eligible products, equal to one-third of the maximum allowable volume under U.S. international trade commitments. USDA has invited bids for nonfat dry milk; that allocation was awarded in August.

Table 1. DEIP Tonnage Allocations and Percentage Awarded, by Product, through November 30, 2003

PRODUCT	WTO LIMIT	ALLOCATION	PERCENT AWARDED
Nonfat Dry Milk	68,201 MT	22,733 MT	100%
Cheese	3,030 MT	1,010 MT	Not Yet Invited
Butterfat	21,097 MT	7,032 MT	Not Yet Invited

Since that time, USDA has made no further announcements regarding DEIP. One likely reason is that world market prices for nonfat dry milk currently reported by USDA are higher than the purchase price under the federal Dairy Price Support Program. For the week ending December 5, 2003, the mid-point of the range of reported nonfat dry milk prices was more than 84 cents per pound in Western Europe, and more than 81 cents per pound in the Oceania region. This compares to the USDA support purchase price of 80 cents per pound.

Posted December 8, 2003