Dairy Donation Program (DDP): What Do I Need to Know?

Participation 

Q: Who is eligible to participate?

A: To participate in the Dairy Donation Program (DDP), you must be an eligible dairy organization (EDO). EDOs are dairy processors or dairy farmers (either individually or as part of a cooperative) that:

  1. account to a Federal milk marketing order (FMMO); and
  2. incur a qualified expense related to certain dairy product donations.

Once these qualifications are met, the EDO can form a partnership to donate dairy products with an eligible distributor.

Q: What is an Eligible Distributor?

A: A public or private non-profit feeding organization able to distribute donated eligible dairy products to recipient individuals and families. Examples of eligible distributors include food banks, churches, shelters, or soup kitchens.

Q: What is the eligibility period?

A: To receive reimbursements for donated eligible dairy products under the DDP, dairy products must have been donated any time on or after January 1, 2020, and until program funds are expended.

Q: What does it mean to account to a FMMO?

A:  An EDO does not have to be regulated by a FMMO to participate in the DDP; however, to be eligible for the DDP, an EDO must “account to” a FMMO. For EDOs that already file a report with a FMMO office, this requirement is met. For EDOs that do not already file a report, they must file a Receipts and Utilization report to a FMMO office. The report lists the fresh fluid products and/or bulk dairy commodity products purchased and how they were used to produce donated eligible dairy products. This report must be filed for every production month of donated eligible dairy products. Since EDOs may not know they will be donating product at the time of production, reports may be filed retroactively. If you are unsure of where to file your report, contact ddp@usda.gov for assistance. Filing this report for the purpose of participating in the DDP will not cause an EDO to become regulated by the FMMO.

Application Information 

Q: What is the application and reimbursement process?

(Note: Detailed information on filling out the DDP forms can be found in the Step-by-Step Detailed Explanation of DDP Forms housed on the DDP website)

A:  

Step 1: EDO partners with eligible distributor to make new dairy product donations or for donations already made.

Step 2: EDO completes and submits a password protected Dairy Donation and Distribution Plan Form (Plan) located at the DDP website to ddp@usda.gov. Plans and passwords should be submitted in separate emails.

Step 3: Eligible distributor completes and submits the Eligible Distributor Certification Form confirming nonprofit status and ability to distribute donated eligible dairy products located at the DDP website to ddp@usda.gov.

Step 4: AMS confirms the EDO accounts to a FMMO. If they do not, AMS will work with the EDO to complete and file the proper form.

Step 5: AMS approves or disapproves eligible partnership and its Plan within 15 business days.

Step 6: EDO submits Reimbursement Claim Forms located at the DDP website and relevant supporting documentation. This may be completed annually, monthly, or weekly, after the Plan has been approved and product has been donated. Reimbursement will only be processed if the donation has been made.

Step 7: AMS reimburses EDO.

Q: When will I know if my Plan was approved?

A: AMS will review your Plan and notify the EDO, via email, regarding approval or disapproval for program participation within 15 business days of submission. If approved, the email will include your Plan approval and a password to be used to unlock your Plan-specific information on the Reimbursement Claim Form. The customized form will be pre-populated with information provided in your Plan. This information will make the form easier to complete. Please retain your Plan approval email for future reference.

Q: How many EDOs and how many eligible distributors can be included on each Dairy Donation and Distribution Plan?

A: A Plan reflects one partnership between an EDO and an eligible distributor. All EDO plants and eligible distributor locations, applicable to a partnership, may be listed on the same Plan. For example, an eligible distributor can be an umbrella organization with multiple locations, with all of these locations covered under one Plan.

Both EDOs and eligible distributors may form multiple partnerships, but each partnership requires a separate Plan.

Reimbursement & Claims 

Q: What costs will DDP reimburse?

A: The DDP reimburses the EDO for:

  1. cost of milk to make the donated product –the applicable classified price of the fresh fluid milk or bulk dairy commodity product milk equivalent used in the donated dairy product;
  2. certain manufacturing costs—a standard cost for manufacturing the donated dairy product;
  3. certain transportation costs between the plant and distribution location—established based on an average diesel fuel cost, fuel economy rate, and shortest distance between locations

See the Federal Register Notice on the DDP website for more specific information on how the reimbursement rate is calculated.

Q: Which class price and which month applies for my reimbursement?

A: AMS will reimburse for donations made based on the class of milk used to make the donated dairy product and the class price for the month the dairy product is produced.

Q: How are manufacturing costs determined for my donated eligible dairy products?

A: Manufacturing costs will be reimbursed at the make (manufacturing) allowance levels used in the FMMO system, which are generally accepted by the industry as representative costs of manufacturing dairy products from raw milk. The DDP will use the FMMO make allowances in the Class III and IV price formulas to reflect manufacturing costs for Class III and IV products, as they are based on surveyed cost data of wholesale Class III and IV products. For Class I and II products, the Class IV make allowance contained in the Class IV price formula will be applied because surveyed cost data for Class I and II products does not exist. AMS is seeking public comments on manufacturing costs for Class I and II products and, if there is reasonable evidence to support changing the costs, will update the costs accordingly in the final rule.

Q: How are transportation costs determined for my donated eligible dairy products?

A: The transportation cost reimbursement will be based on the U.S. monthly average diesel fuel price for the month the donation was made, a fuel economy factor of 6.1 miles per gallon, and the shortest hard-surface distance from the plant that processed the donated eligible dairy product to the eligible distributor’s physical distribution location.

Q: Can my organization be reimbursed for donations made prior to the start of this program and am I required to partner with an eligible distributor?

A: Yes. Donations made on or after January 1, 2020, are eligible for retroactive reimbursement. As an EDO, your organization will need to form a partnership with an eligible distributor and apply for eligibility by submitting a Dairy Donation and Distribution Plan Form and Eligible Distributor Certification Form available on the DDP website. If you are seeking retroactive reimbursement, form the partnership and complete the Plan with the eligible distributor(s) that received your donations. Once the Plan is approved, EDOs can then submit documentation to receive reimbursement.

Q: What is a Retroactive Reimbursement?

A: A retroactive reimbursement is a payment available for donations made beginning January 1, 2020, under the DDP. You must submit a Dairy Donation and Distribution Plan Form and Eligible Distributor Certification Form as explained in the previous question to be eligible.

Retroactive reimbursement funding for donations made between January 1, 2020, through the signing of the statute authorizing the DDP, December 27, 2020, are subject to a limited amount of funding not to exceed $50 million. The deadline to submit claims for a retroactive reimbursement is March 1, 2022. At that time, all submitted claims will be processed. If total claims exceed $50 million, reimbursement rates will be prorated accordingly.
All other retroactive reimbursement claims for donations made after December 27, 2020, are not subject to the $50 million cap or the deadline submission date of March 1, 2022, and will be processed when received.

Q: How often may I submit claims for reimbursement?

A: Once your Plan has been approved, you may submit claims as frequently as you choose. In your Plan approval email, you will receive a password to unlock your Plan-specific information on the Reimbursement Claim Form. The customized form will be pre-populated with information provided in your Plan. This information will make completing the form less time intensive.

The Reimbursement Claim Form requires detailed information regarding the donated dairy products under your approved partnership. To ensure the most accurate information is available within your form for calculating reimbursements, please download the latest version from the DDP website each time you complete the form for submission.

Q: How often will AMS issue reimbursement payments?

A: Once your Plan has been approved, Reimbursement Claim Forms can be submitted at any time. AMS will review, process, and issue reimbursement payments at least once per quarter.

Q: In addition to the Reimbursement Claim Form, what kind of documentation does my organization need to provide to receive reimbursement?

A: Documentation used to provide proof of donation includes normal business records kept by the EDO such as: processing and shipping records; bills of lading; warehouse receipts, distribution records; and/or receiving records from the eligible distributor. You do not need to supply all of these types of records. You only need to submit one type of record that demonstrates the reported amount of eligible dairy products were processed and donated.

Q: What is the yield factor used for and what if I do not know the yield factor for an eligible dairy product on the Reimbursement Claim Form?

A: The yield factor is needed to determine how much raw milk was used in your donated dairy product. The DDP reimburses the EDO for the raw milk used to manufacture each specific donated product. If you do not provide your own yield factor and UPC code (see Reimbursement Claim Form instructions), a standard yield factor for that product will automatically be applied.

Q: Is donated raw milk eligible for reimbursement?

A: No. Raw milk is not eligible under this program since it does not comply with the program’s commodity specifications.

Q: What if my EDO did not do the initial processing of raw milk into a dairy product, but instead processed a bulk dairy product into an eligible dairy product in consumer-sized packaging? Am I still eligible for reimbursement?

A: Yes. The EDO will be reimbursed for the raw milk used in the donated products at the relevant classified price for the month the bulk dairy product was processed into an eligible dairy product, as well as the applicable manufacturing and transportation costs.

Milk Donation Reimbursement Program 

Q: My organization participated in the Milk Donation Reimbursement Program (MDRP). Do I need to reapply for the Dairy Donation Program?

A: No, you do not need to reapply. If you received reimbursements for donated fluid milk products under the MDRP since January 1, 2020, you will automatically be enrolled in the DDP.

Q: If my organization participated in the MDRP, will I receive additional reimbursements on the fluid milk donated since January 1, 2020?

A: Yes. Since you will automatically be enrolled in the DDP, you will receive supplemental reimbursement payments for those donated eligible fluid milk products you received reimbursement for under the MDRP. The supplemental reimbursements will ensure donations made under MDRP receive the same reimbursement rate as donations made through the DPP. This means you will ultimately receive additional payments for milk costs, manufacturing costs, and transportation costs on the products you donated and submitted claims for under MDRP since January 1, 2020.

Additional Questions 

Q: What specifications must the donated eligible dairy products meet?

A: Donated eligible dairy products must comply with all Federal, State, and local laws, executive orders, and rules and regulations related to its performance. To qualify for reimbursement under the DDP, eligible dairy products must:

  1. Be made primarily from cow’s (bovine) milk produced in the United States;
  2. Be packaged in consumer-sized packaging;
  3. Meet the applicable provisions for dairy products in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et. seq.), as amended; Grade ‘A’ dairy products shall meet the applicable provisions of the current edition of the Pasteurized Milk ordinance; and
  4. Have a sell-by, best-by, or use-by date no sooner than 12 days from the date the eligible dairy product is delivered to the eligible distributor.

Q: What is considered consumer-sized packaging?

A: All eligible donated dairy products must be in consumer-sized packaging. These are any consumer-sized packaging agreeable to both entities in a partnership. Examples of consumer-sized packaging include, but are not limited to, gallons of milk, 1-pound blocks of cheese, single serve containers of yogurt, 1-pound packages of butter, or large bags of milk if the eligible distributor has the ability to dispense (i.e. a soup kitchen). When submitting Plans for approval, the EDO is required to list what types of dairy products it plans to donate.

Q: Where can I find information on classified milk prices in my area?

A: Refer to the USDA Final Class Prices by Order for your region to find data on classified milk prices, as well as other statistics.

Q: How do I find eligible distributors in my area to donate eligible dairy products?

A: If you have dairy products to donate but need help locating eligible distributors in your area, please contact ddp@usda.gov and the DDP Outreach Coordinator will help you locate eligible distributors in your area.

Q: How will my sensitive information (i.e. personal identifiable information) be kept safe by AMS?

A: Forms, such as the Plan, that contain sensitive information will be password protected. When you complete a Plan for submission, encrypt the file with your chosen password and send it in a separate email to ddp@usda.gov. More detailed information on filling out the forms can be found in the Step-by-Step Detailed Explanation of DDP Forms housed on the DDP website.