§ 1430.302 - Commencement and termination of DPDP purchases.

§ 1430.302 Commencement and termination of DPDP purchases.

(a) DPDP purchases commence only if approved by the FSA Administrator under the provisions of this subpart. The FSA Administrator will approve DPDP purchases only if the actual dairy production margin has been $4 or less per cwt for each of the preceding 2 months. The actual dairy production margin will be calculated as specified in § 1430.110. The following chart shows an example of the timing for the determination of DPDP purchases.

DPDP Purchase Determination Example Based on Dairy Production Margins and 3-Month Maximum for Purchases¹

2 Consecutive months	Calculate margin for 2 consecutive months2	If both margins below $4 per cwt in the 2 consecutive months	3-Month maximum consideration	If either margin above $4 per cwt in the 2 consecutive months
January and February	March	Dairy product purchases3 begin in April	1st month of purchases	No purchases.
February and March	April	Dairy product purchases3 begin in May	2nd consecutive month of purchases	No purchases.
March and April	May	Dairy product purchases3 begin in June	3rd consecutive month of purchases	No purchases.
April and May	June4	No purchases; terminated after 3 consecutive months	3-month maximum reached (1st month off)	No purchases.
May and June	July	No purchases; terminated after 3 consecutive months	3-month maximum reached (2nd month off)	No purchases.
June and July	August	No purchases; terminated after 3 consecutive months	3-month maximum reached (3rd month off)	No purchases.
July and August	September	Dairy product purchases3 begin in October	1st month of purchases	No purchases.
August and September	October	Dairy product purchases3 begin in November	2nd consecutive month of purchases	No purchases.
September and October	November	Dairy product purchases3 begin in December	3rd consecutive month of purchases	No purchases.
October and November	December	No purchases; terminated after 3 consecutive months	3-month maximum reached (1st month off)	No purchases.
November and December	January	No purchases; terminated after 3 consecutive months	3-month maximum reached (1st month off)	No purchases

¹ This example assumes that purchases begin in January. In reality, DPDP can - depending on prices and margin triggers - begin on September 1, 2014, which is the start of MPP-Dairy.

² The full month data for a given month is available at the end of the following month. For example, January data are not available until the end of February.

² Purchases cannot begin unless domestic cheddar cheese or nonfat dry milk prices are at certain differentials relative to world prices.

³ In the example, June is the 3rd month of consevutive purchases. June would not be calculated as a potential trigger month, but it is shown on the chart to clearly show the concept of 3 months on and 3 months off for purchases. If purchases are taking place during a month, that month cannot be used as a trigger month for a future purchase period.

(b) DPDP purchases terminate and are not reinstated until the condition specified in paragraph (a) of this section is again met, whenever any one of the following occurs:

(1) If purchases were made for the preceding 3 months, even if the actual dairy production margin remains $4 or less per cwt of milk.

(2) If the actual dairy production margin has been greater than $4 per cwt of milk for the immediately preceding month.

(3) If the actual dairy production margin has been $4 or less, but more than $3, per cwt for the immediately preceding month and during the same month -

(i) The price in the United States for cheddar cheese was more than 5 percent above the world price, or

(ii) The price in the United States for non-fat dry milk (NDM) was more than 5 percent above the world price of skim milk powder.

(4) If the actual dairy production margin has been $3 or less per cwt of milk for the immediately preceding month and during the same month -

(i) The price in the United States for cheddar cheese was more than 7 percent above the world price; or

(ii) The price in the United States for NDM was more than 7 percent above the world price of skim milk powder.

(c) Purchases will terminate beginning with the first day of any month that does not qualify for DPDP purchases.

(d) For calculations under paragraphs (b)(3) and (4) of this section, the FSA Administrator may use data from a single or multiple locales or markets, including weighted averages, in consultation with AMS or other USDA agencies.