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April 22, 2020

Still More Questions Than Answers on Dairy Disaster Aid

 |  By: Jim Dickrell

As of noon today, Wednesday, April 22, there are still more questions than answers regarding dairy disaster aid that was announced five days ago on Friday, April 17.

In a webinar this noon sponsored by the Professional Dairy Producers of Wisconsin, Jim Mulhern, president and CEO of the National Milk Producers Federation, laid out the process of how details will be released. The United States Department of Agriculture (USDA) is forwarding its recommendations to the Office of Management and Budget (OMB). Once OMB signs off, the regulation will be printed in the Federal Register as either an interim or final rule with limited opportunity for comment.

Mulhern says that while he is appreciative of the aid announced, there are concerns. First, it’s unclear what production base will be used to determine payments. Also unknown is what index will be used to determine payments, whether it is the all-milk price, mailbox prices or some other number.

He notes that there will be one payment, but it will be based on both actual and projected losses. Producers will receive 85% of actual losses incurred between January 1 and April 15, and will be paid 30% of the projected losses between April 15 and October 15. The 30% of projected loss portion of the payment is the biggest concern. “The worst for [dairy] is still ahead,” he says.

Payment limits are also a concern. USDA has said there will a $125,000 payment limit per commodity and $250,000 payment limit per farm entity. “These are similar to the Farm Bill program, but these are not Farm Bill payments. They are disaster assistance,” he says. “No other segment of the economy has these low payment limits—whether its airlines, restaurants, and other hospitality businesses.”

Mulhern also says the aid package will buy $1 billion worth of dairy products for food assistance programs. The problem is that USDA is only planning to spend $100 million of that per month to start. “We have a lot of dairy products available to move to food banks now, and the need is there for food assistance,” Mulhern says.

Mulhern says NMPF is still trying to influence the aid package by engaging the White House and USDA before the package is finalized. NMPF is also working with Congress for further assistance in future aid packages.