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USDA Unveils Aid to Producers, Food Box Buys as Congress Prepares Next Round

June 2, 2020

President Donald Trump and Agriculture Secretary Sonny Perdue announced May 19th the details of the Coronavirus Food Assistance Program, which will provide $16 billion in direct payments to producers including dairy farmers. NMPF voiced its appreciation for dairy assistance.

“We welcome this federal dairy assistance, which is critically needed as the nation’s dairy farmers face an unprecedented market collapse,” said Jim Mulhern, president and CEO of NMPF, the largest U.S. dairy-farmer organization. “USDA’s plan will provide relief to many farmers, and we appreciate the department’s adjustments to payment limits, an issue which we raised prior to the department finalizing this package.”

Still, even with this badly needed support, additional aid will be essential to reflect the full losses that dairy farmers – who with projected losses topping $8 billion are among the hardest-hit — and other agricultural sectors have faced from the coronavirus crisis. NMPF will continue to work with administration officials and members of Congress to achieve adequate aid for all dairy producers.

Details on the assistance for dairy:

CFAP will calculate a single payment derived from two funding formulas intended to calculate losses caused by the coronavirus in 2020. The first, and larger, component of the assistance is calculated from a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundredweight. The second component is based on a 1.014% increase in that first quarter production, multiplied by $1.47 per hundredweight. These two payment components are equivalent to a single payment equal to first quarter production multiplied by $6.20 per hundredweight.

USDA will make an initial payment of 80 percent of an eligible participant’s total benefit. The remaining portion of a farmer’s payment will be paid later as funds remain available.

CFAP payments are subject to a per-person and legal entity payment limitation of $250,000, a significant improvement over an earlier $125,000 limit that NMPF fought hard to change. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities. However, some entities may be eligible to receive up to $750,000 in payments depending on their incorporation and number of shareholders that contribute substantial labor or management to the operation of the entity.


Food Box Boosts Dairy

The direct assistance to farmers follows USDA’s acceptance of an initial round of contracts to buy $317 million in dairy products as part of its Farmers to Families Food Box Program, which is bolstering both milk prices and dairy supply chains.

Mulhern applauded USDA’s planned purchases of milk and dairy products for distribution through food banks and other non-profit organizations. “All that USDA can do to buy and quickly distribute dairy products to those in need will immediately help lift depressed markets,” he said.

In addition to the White House and USDA, NMPF thanked the many members of Congress who have urged USDA to provide robust assistance to dairy and will be essential to achieving additional assistance. “A strong bipartisan, bicameral, nationwide push from members of Congress will be necessary to enact the significant dairy aid package needed for farmers to survive,” Mulhern said. “We thank our champions in Congress for their tireless advocacy and hope more will join as we work together to preserve dairy farms and support the U.S. economy.”


The Next Round

Work is already beginning in Congress on the next round of relief legislation. The HEROES Act, passed by the House of Representatives last week, includes important provisions to provide relief to dairy producers, and the Senate is slated to begin work on a measure in the coming weeks.

The HEROES Act includes multiple provisions to provide additional direct relief to dairy farmers based on the losses they face this year. The bill also includes NMPF-advocated provisions to strengthen opportunities for milk and dairy product donations to help farmers and consumers. Finally, the package provides important nutrition assistance to the millions of American families and households who are facing food insecurity during this difficult time.

NMPF looks forward to continuing to work with Congress and the Trump Administration to provide important relief to all dairy farmers as this process continues.