Illinois, Indiana and Iowa do not require dairy producer security.
Data and Analytical Methodologies
DATCP analyzed the APSF fiscal year 2014 reports to estimate the projected overall fund balance expected on February 28, 2015. DATCP reviewed 2014 financial statements filed by contractors to determine a range of dairy contractor fund assessments due for the license year beginning May 1, 2015.
DATCP Contact
Questions and comments (including hearing comments) related to this rule may be directed to:
David Woldseth
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-5164
______________________________________________________________________________
Finding of emergency
(1) In Wisconsin, milk contractors (persons who purchase milk from producers or producer agents) must obtain a license to purchase milk from producers or producer agents, and are collectively referred to as “contractors”. Most contractors are “contributing contractors”, which means they must pay annual assessments into the Wisconsin Agricultural Producer Security Fund. This fund is designed to help partially reimburse producers in the event that a contractor defaults on payment to producers and producer agents. The annual assessments are calculated based on the total dollar value of commodities purchased, the length of time that the contractor has participated in the fund, and certain financial ratios from the contractor’s balance sheet.
(2) The milk contractor license years begin on May 1 of each year. At that point, DATCP calculates the assessment for the new license year that will be due for each contractor, and determines if a given contractor meets exemption requirements established under ATCP 100.135 (10), Admin. Code., for that license year. Current exemption requirements are: the milk contractor was classified as a contributing milk contractor in each of the 5 license years immediately preceding that license year; the fund balance attributable to milk contractors was at least $6 million on February 28 of the preceding license year; and, the overall fund balance was at least $11 million on February 28 of the preceding license year.
(3) The overall fund balance is expected to be less than $7.6 million on the next assessment date of February 28, 2015, due to a large claim brought against the fund in 2014 by vegetable producers. This decrease in the overall fund balance would eliminate eligibility for fund assessment exemption for every milk contractor over the next 6-7 years, costing the industry $420,000 - $800,000 annually.
(4) This temporary emergency rule is necessary to protect the welfare of the over one hundred milk contractors who do business in Wisconsin, and to help prevent undue financial burdens upon the milk contractor industry.
Emergency rule
Section 1. ATCP 100.135 (10) (c) is amended to read:
ATCP 100.135 (10) (c) The overall fund balance was at least $11 $5 million on February 28 of the last preceding license year
Section 2. Effective Date: This emergency rule takes effect on May 1, and remains in effect for 150 days. The department may seek to extend this emergency rule as provided in s. 227.24, Stats.
