Some dairy farmers may find financial relief through the Pandemic Market Volatility Assistance Program and the Dairy Donation Program that the U.S. Department of Agriculture announced last month.
The department will provide about $350 million in pandemic assistance payments to dairy farmers who have been receiving lower value for their products because of the “market abnormalities caused by the pandemic.”
According to an Economic Impact of COVID-19 on Michigan Agricultural Production Sectors report last September, dairy farmers are some of the most affected in the agricultural sector. The report stated that dairy production suffered a 25.2%, or $464,342,000, decline in estimated economic output for the Michigan agricultural supply chain.
However, Trey Malone, assistant professor for the Department of Agricultural, Food, and Resource Economics College of Agriculture and Natural Resources at Michigan State University, said the prices are rebounding.
Nevertheless, Joe Diglio, president and CEO of the Michigan Milk Producers Association, told the Business Journal in August that the revenue from higher prices for dairy products are not trickling down to dairy farmers to offset production costs such as animal feed, equipment, machinery repairs and labor at the farm level.
The Pandemic Market Volatility Assistance Program will reimburse eligible “dairy farmers for 80% of the revenue difference 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 USDA’s new $400 million Dairy Donation Program allows for eligible dairy farmers and organizations to partner with non-profit feeding organizations that distribute food to individuals and families in need. The participants may receive reimbursements to cover some expenses related to eligible dairy product donations.
The program was fashioned, in part, by the Michigan Milk Producers Association’s partnership with the Food Bank of Eastern Michigan in response to the Flint water crisis.
“MMPA is excited for the launch of this new program, which builds on the significant donation partnerships we have been undertaking in Michigan for the last several years,” Diglio said. “Our dairy farmer members and others in the dairy sector have long supported giving back to our communities, and this program helps expand our efforts. We thank Senator (Debbie) Stabenow for her leadership in getting this program enacted into law, and we applaud the U.S. Department of Agriculture for its work in implementing this new program, which will aid hunger relief efforts across the country while reducing food waste and supporting local dairy farmers.”
Dairy farmers will be reimbursed for the cost of milk used to make the donated eligible dairy products and some of the manufacturing and transportation costs.
“This program comes at a time when the need has never been greater for fresh foods to help Michiganders,” said Phil Knight, executive director of the Food Bank Council of Michigan. “Michigan’s agricultural community, especially the state’s dairy farmers, have come alongside of us throughout the pandemic. Their partnership means fresh, nutritious food and milk for families, children and seniors.”