Through the Pandemic Market Volatility Assistance Program, USDA will provide about $350 million in pandemic assistance payments to dairy farmers who received a lower value for their products due to market abnormalities caused by the pandemic.
The assistance is part of a larger comprehensive package that will total over $2 billion, including permanent improvements to the Dairy Margin Coverage safety net program.
Payments will reimburse qualified dairy farmers for 80% of the revenue difference per month based on an annual production of up to 5 million pounds of milk marketed and on fluid milk sales from July through December 2020. The payment rate will vary by region based on the actual losses on pooled milk related to price volatility.
“While dairy farmers would much rather receive all their compensation from the marketplace, 2020 was certainly not a normal year,” said Ernie Birchmeier, Michigan Farm Bureau dairy and livestock specialist.
“These dollars will certainly not fill the entire void, but they will definitely help. We urge dairy cooperatives to work with their members to make sure the dollars reach the farms for which they were intended for.”
The National Milk Producers Federation (NMPF) said the money is appreciated but falls significantly short of meeting the needs of dairy farmers nationwide.
“The arbitrary low limits on covered milk production volume mean many family dairy farmers will only receive a portion of the losses they incurred on their production last year,” said Jim Mulhern, NMPF president and CEO.
“These losses were felt deeply by producers of all sizes, in all regions of the country, embodying a disaster in the truest sense of the word. Disaster aid should not include limits that prevent thousands of dairy farmers from being meaningfully compensated for unintended, extraordinary losses.”
According to NMPF, the government’s COVID-19 response created unprecedented price volatility in milk and dairy-product markets that produced disorderly fluid milk marketing conditions that so far have cost dairy farmers nationwide more than $750 million from what they would have been paid under the previous system.
“Farm Bureau members have been working over the past several months to develop long term solutions to dairy pricing that are more reflective and representative of our current dairy industry,” Birchmeier said.
“If we can build a better system that meets the needs of everyone and avoid future pandemics, we can hopefully avoid situations in the future where we need to rely on the government for assistance.”
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