New Delhi, August 20, 2021: Standing on a Vermont dairy farm Thursday, USDA Secretary Tom Vilsack announced more financial help is on the way for dairy farmers who received lower prices for dairy products during the COVID-19 pandemic. USDA also announced changes to the Dairy Margin Coverage safety net program.
Vilsack, along with Sen. Pat Leahy (D-Vt.), rolled out details of the Pandemic Market Volatility Assistance Program, which will provide $350 million in assistance payments to eligible dairy farmers. The payments are aimed to reimburse farmers for 80% of the revenue difference per month and will be based on annual production of up to 5 million pounds of milk marketed from July through December of 2020. USDA says the payment rate will vary by region based on the actual losses on pooled milk related to price volatility
USDA also announced what the agency sees as improvements to the Dairy Margin Coverage safety net program, by updating the feed cost formula in the program. The agency says the changes will better reflect the actual costs dairy farmers pay for high quality hay. The payments will be retroactive to January 2020, with the changes expected to produce an additional $100 million in retroactive payments for both 2020 and 2021.
The Agriculture Department says Thursday’s announcement are the first steps in a $2 billion package of assistance for dairy farmers.
“The Pandemic Market Volatility Assistance Program is another component of our ongoing effort to get aid to producers who have been left behind and build on our progress towards economic recovery,” said Vilsack in a statement. “Family dairy farmers have been battered by the pandemic, trade issues and unpredictable weather and are the life-blood of many rural communities throughout Vermont, the Northeast and many other regions. This targeted assistance is the first step in USDA’s comprehensive approach that will total over $2 billion to help the dairy industry recover from the pandemic and be more resilient to future challenges for generations to come.”
Farm Journal Washington Correspondent Jim Wiesemeyer says the announcement is part of USDA’s broader program introduced in March 2021. The agency then provided a second announcement in June saying USDA would be providing additional pandemic payments targeted to dairy farmers who suffered losses not covered by prior pandemic assistance, as well as nearly $580 million in supplemental Dairy Margin Coverage (DMC) payments that would be targeted to small and medium-sized farms. The program also included $400 million for a new Dairy Donation Program, according to reports published in dairyherd.com
“I thank Secretary Vilsack for directing this assistance to small dairies in Vermont and across the country, just as he told me he would when we spoke earlier in the summer,” said Leahy. “This will help to make up for losses suffered by these family farms due to the pandemic and together with the positive adjustments to the Dairy Margin Coverage Program will be good news for farmers go into the fall.”
While the Senator praised the program, National Milk Producers Federation (NMPF) released a statement casting concerns about portions of USDA’s announcement Thursday. NMPF CEO Jim Mulhern says while NMPF is grateful for the Vilsack and USDA’s work to provided needed support to dairy farmers, it’s not enough for dairy farmers to recoup losses directly related to the pandemic.
“Today’s announcement is an initial step in this effort that will help many producers, but it unfortunately falls significantly short of meeting the needs of dairy farmers nationwide,” said Mulhern in a statement. “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. 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.”
Mulhern says additional work is needed to fully remedy the losses; however, he praised USDA’s work to incorporate premium-quality alfalfa prices into the Dairy Margin Coverage program, as well as the Dairy Donation Program by USDA.
