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NOTICE TO DEIP PROGRAM PARTICIPANTS Notice Number: DEIP-FY 01-1 SUBJECT: Change in Operating Procedures Under DEIP

WASHINGTON, Aug. 10, 2001–The U.S. Department of Agriculture today announced changes in operating procedures for the Dairy Export Incentive Program (DEIP). The changes described below are being made to help maximize the export of the DEIP allocations by reallocating canceled tonnage within the same marketing year and to simplify the reporting of Coasts of Export.

Final Date To Export: Under the applicable DEIP invitations, the exporters’ contractual delivery period can be no later than March 31, 2002. Contractual delivery periods with a final date to ship prior to March 31, 2002, will automatically have until March 31, 2002, to ship the product. For example, if an exporter reports a delivery period of Aug. 1 through Dec. 31, 2001, and the product is not shipped until Jan. 20, 2002, no amendment to the delivery period will be necessary. DEIP offers with contractual delivery periods after March 31, 2002, will be considered nonresponsive.

All DEIP agreements under the applicable invitation will expire at midnight (EST) March 31, 2002, and any unshipped tonnage will be considered canceled. Exporters should report to CCC the agreement numbers and tonnage under those agreements that were shipped by March 31, 2002, but where documents have not been submitted to Kansas City. Under the regulation, exporters have 30 or 60 days, depending on the performance security "option" selected by the exporter, to submit documents to Kansas City for payment.

After the March 31, 2002, expiration, FAS staff will determine the amount of unshipped tonnage and any tonnage not awarded in the initial invitation. On or about May 1, 2002, a new invitation to expire June 30, 2002, will be issued for that tonnage. Any open balance not awarded or canceled tonnage as a result of the May 1st invitation will not be reallocated again.

Coast of Export Reporting: Under the applicable invitation, exporters are no longer required to specify individual coasts of export for shipments by ocean vessel in DEIP offers or applications. For shipments by ocean vessel, the exporters should report the coasts of export as "All US Coasts." However, if transhipped through a Canadian port on the St. Lawrence River, the port must be specified. Furthermore, if shipped overland, point of export must be specified. Reporting "All US Coasts" will maximize the exporters flexibility and eliminate the need for amendments due to coast changes.

Further Information: Invitations and other information about the DEIP are available on the FAS web site at or by calling the Operations Division, Export Credits, FAS, at (202) 720-3224 or (202) 720-6211.

#PR 0229-01

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