Dairies contend with loss, but are hopeful for assistance

U.S. dairy farmers are facing more than $17 billion in losses tied to the COVID-19 pandemic, but an uptick in prices and flow of federal assistance might offer relief in upcoming months.

Virginia’s dairy industry has suffered financial stress for years—now worsened as school closures have decimated demand for dairy products. The Virginia Farm Bureau Federation Dairy Advisory Committee held a webinar in May to discuss current market conditions and supply chain disruptions.

During the webinar, Dr. John Newton, American Farm Bureau Federation chief economist, noted that Class III dairy (cheese and whey) prices are beginning to increase. He speculated that may be due to increased food assistance program spending. Newton noted that some dairy farmers will be eligible for up to $250,000 in direct relief payments through the U.S. Department of Agriculture Coronavirus Food Assistance Program.

“Dairy farmers will be able to request some financial relief, but it won’t be enough to make them whole for the losses incurred,” said Tony Banks, VFBF senior assistant director of agriculture, development and innovation. “Likewise, clients of food assistance programs and sponsor charities will receive much-needed donations of dairy through CFAP spending.”

He said approximately $3.44 billion of the total $16 billion is estimated for payments to dairy farmers. Food assistance programs should receive at least $3 billion.

CFAP also is funding the Farm to Families Food Box Program, which will purchase $100 million in milk and dairy products per month for distribution to food banks and other charities. Another purchase of $120 million in dairy products is planned through June for The Emergency Food Assistance Program as part of a larger $470 million distribution of food to USDA-affiliated food banks.

“The food box program is new and somewhat unique,” Banks said. “Food bank clients will be eligible to receive a box filled with various dairy products and fluid milk. The food boxes will be distributed ‘consumer-ready’ to food charities, meaning the box is packed and ready for client pick-up when a charity receives it. This will mean fewer human touches and a much more efficient delivery mechanism.”

Michael Myatt, general manager of the Cooperative Milk Producers Association, said dairy marketing groups asked the USDA to establish a temporary, emergency price mover for fluid milk. However, the petition was blocked due to pending dairy farm relief programs.