1. Extension of Milk Income Loss Contract Program MILCX

2. MILCX Program Signup Two Phases of Signup – Initial Signup Phase – (Mar. 13 – May 17, 2006) – Extended Signup Phase – (May 18 – Sept. 30, 2007)

3. Production Start Month Selection MILCX payments begin with the month selected and continue with each consecutive month thereafter, until the earlier of: Maximum payment quantity is reached End of the FY.

4. Start Month Selection Options Initial Phase Options Any month, Oct/05 thru May/06 – Selection rules do NOT apply Any month, Jun/06 thru Sep/06 – Selections rules DO apply Extended Phase Options Month MILCX is submitted – Selection rules do NOT apply Month remaining in the FY after MILCX is submitted – Selection rules DO apply

5. Examples During Extended Phase Month MILCX is submitted: The production start month for the dairy operation will be June Month remaining in FY: The production start month for the dairy operation can be either August or September A producer submits MILCX to COF on June 25, 2006, and selects:

6. Start Month Selection Rules Start Month Selections must be made: On or before the 14 th of the month before the month selected, as applicable Before the BCI price for the month selected is announced A month cannot be selected that: Has already begun Has already passed No milk was produced

7. Changes to Start Month Selection Changes to the start month selected must be made on or before the 14 th of the month BEFORE the: Month originally selected Newly selected month This is applicable to those options in the initial and extended signup phases where the selection rules apply and in advance of the rates being known for the original month and the new month being selected.

8. Changes to Start Month Selected Changes to the retroactive payment months of the Initial Signup Phase must be made before the earlier of: Payment being issued for the selected month COB May 17, 2006

9. Production Evidence From Co-ops Existing authorizations currently on file in the COF used during the MILC program may be used for MILCX. COF’s must: Detach authorization from MILC Re-attach authorization to MILCX.

10. FY 2006 MILCX Payment Rates MonthPayment Rate October 2005$0.0000000 November 2005$0.0000000 December 2005$0.0408000 January 2006$0.1054000 February 2006$0.1054000 March 2006$0.4080000 April 2006$0.8398000