USDA Allows Carryover of Unused DEIP Quota

May 14, 1999

USDA will allow the carryover of unused dairy quota under the Dairy Export Incentive Program for another 50,000 tons of products National Milk Producers Federation says the action will help increase dairy prices.

Agriculture Secretary Dan Glickman said the additional products will include skim milk powder, whole milk powder and cheese to be exported under the DEIP. Although the United States is subject to annual World Trade Organization limits on the amount of dairy products subsidized under the DEIP, the carryover totals represent the difference between what the United States is allowed by the WTO to export and what actually was exported between 1996 and 1998.

Under WTO rules, a country may carry over to future years any volumes and spending permitted, but not used, in a given year. European Union nations have used this carry over technique to subsidize $200 million of additional exports of rice, olive oil, beef and wine and has been increasing its subsidy rates for dairy exports in recent months.

NMPF CEO Jerry Kozak said the action is "crucial to both the short term and long term health of the U.S. dairy industry particularly because our price support program will end in eight months. We need to maximize the use of all of the tools available to us to remain competitive in the world market.

"This additional volume of nonfat dry milk that we can now export is worth about $100 million to the U.S. dairy industry," said Kozak, "and it comes at a time when farm prices are anemic. This is a real shot in the arm for the dairy producer community."