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DEIP Update, January 2004: Program Bolts Forward The U.S. Department of Agriculture (USDA) sent the Dairy Export Incentive Program (DEIP) into action recently, following four months of relegating it to the sidelines. After allocating the remaining tonnage of nonfat dry milk (NFDM) and cheese on December 24 and inviting bids for this tonnage (plus an earlier cheese allocation), USDA awarded the full amounts to just six bids on January 7. Without explanation, USDA immediately withdrew the cheese awards, with the total cheese tonnage re-invited and awarded again the following week. These actions close out the NFDM and cheese tonnage allowed by World Trade Organization (WTO) rules until July 1, 2004, since the DEIP fiscal year runs from July 1 to June 30.Butter is the only remaining product with tonnage allocation still available. The current status of the 2003-04 DEIP is summarized in Table 1 below.
The complete tonnage for cheese in the 2003-04 DEIP fiscal year was awarded in only four bids. The first three bids will move a total 3,000 MT of mozzarella for an average bonus of $308/MT (about $0.14/lb.). The remaining 30 MT was awarded as monterey jack for an average bonus of $325/MT (about $0.15/lb.). Most of the new tonnage awarded is destined for the Caribbean/Central and South America region. Almost 35,500 MT of NFDM, more than 80% of this recent allocation, and all 3,030 MT of the cheese is headed to this region. The remaining 7,000 MT of NFDM is going to Asia and/or the former Soviet Union. Table 2 below summarizes the destinations and bonuses for NFDM and cheese in this DEIP year.
Posted January 20, 2004
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