Current federal aid programs available to dairy farmers are considered good first steps in helping them navigate the ongoing COVID-19 pandemic and related demand issues, but more will be needed, according to the National Milk Producers Federation.
Last week, Congress approved nearly $500 billion in additional funds to help small businesses, including farms, through the Paycheck Protection Program and other measures. However, NMPF spokesperson Chris Galen says the resources provided to the Small Business Administration are not enough to meet demand.
“It looks like that there’s been so much demand on lenders and the SBA that either the websites have crashed, or banks don’t have access to the money because it’s already gone. So, that’s certainly very frustration for a lot of groups like ours that worked very hard to get the money initially a few weeks ago, and then to get this second supplement of money here this past week. But, what I think it illustrates is that there’s a lot of government programs out there to help various entities in the business community, including agriculture, and right now the demands for that, whether it’s the PPP or USDA assistance, are much greater than what the supply of money is.”
Meanwhile, the Department of Agriculture, at the direction of Congress, will spend nearly $16 billion in direct support to farmers, and an additional $3 billion on commodity purchases, through the Coronavirus Food Assistance Program. Galen says, still, dairy farmers face a tough road ahead.
“One of our concerns is that the payment formula that USDA has come out with is heavily weighted towards income losses that occurred between the beginning of this year and April 15. And the smaller payment rate will be losses from April 15 through the next six months. That’s when the need is going to be greatest, that’s when the prices are going to be lowest. We’re looking at disastrously low prices here this spring for dairy farmers. And unfortunately, the payment formula that USDA has is more weighted towards the first few months of this year, not towards the spring and summer, when we know that farm level milk prices will be at their worst.”
The newly-unveiled USDA program includes payment limits for all commodities, as well, which is problematic for many farmers.
“I know that for dairy, as well as for a lot of other groups, particularly in livestock and produce, that is way too restrictive. And so, we’ve been working with supporters in Congress to weight in with USDA to see if that can be adjusted in the future. Now the good news is that there are still talks going on about more assistance coming from Congress being appropriated to spend by USDA. So, I don’t think that we’re done at all after talking about this $16 billion that USDA is going to be spending, whether it’s on direct payments or other things like that. That’s a good place to start, but it’s certainly not going to be the end of the conversation because the need is so great.”
USDA is currently soliciting bids for companies to purchase and distribute commodities, including $100 million of dairy products per month, to food banks.
“That is something that farmers can’t necessarily directly benefit from because most farmers are just selling raw milk, they’re not necessarily in the business of selling finished products that would be distributed to food banks. But, we do think there is going to be a positive stimulus effect on the marketplace and that’s why USDA is doing this. And, it was one of the things that we had asked USDA to do earlier in the spring because we need to really make up in any way we can for the loss in food service sales that have occurred here. A lot of that demand has just disappeared virtually overnight. And, that’s why we need USDA to step in wherever possible to serve as a buyer of these type of products and then distribute it to needy Americans and food banks and other community-based organizations.”
Resources for dairy farmers to learn more about aid programs are available online at www.nmpf.org.