Ailing dairy industry explores assistance programs
HARRISBURG, Pa. — As part of its mission of providing resources to the diary industry, Pennsylvania’s Center for Dairy Excellence is hosting conference calls with updates of the pandemic’s effects on dairying. Producers are faced with COVID-19 difficulties, but have available various new programs that may alleviate some of their concerns.
During the most recent conversation, Cynthia Walters, dairy program specialist, Farm Service Agency, responded to questions regarding the application process for the Coronavirus Food Assistance Program.
Walters noted that this direct payments program describes eligibility at https://www.farmers.gov/cfap.
It notes all dairy operations with milk production in January, February and/or March, including dumped milk production during those months are eligible. Applications, through local Farm Service Agency service centers, can be submitted electronically.
A CFAP call center employee, at 877-508-8364, can help producers with the process.
Walters assured producers to not panic if they can’t get through on the telephone right away. “This is not first come, first served,” she said, and adding that the program runs from May 26 until Aug. 28.
Walters pointed out that the payment is derived from two calculations. A payment will be based on the producer’s certification of the first quarter of 2020 milk production multiplied by $4.71 per hundred weight. The second part of the payment is based on a national adjustment to each producer’s production in the first quarter multiplied by $1.47 per hundredweight.
These calculations from two funding sources include the CARES Act to compensate producers for price losses during the 2020 first quarter; and CCC funds to compensate for marketing channel and demand disruptions for the second quarter (April, May and June) due to COVID-19.
Paul Bleiberg, vice president, government relations, National Milk Producers Federation, shared his insight on U.S. Congress plans for additional assistance. While noting the partisan opening, he pointed out that diary is not as controversial. He said that another round of COVID-19 assistance could come in June or by the July 4 holiday, and indicated that by at least August there may be action for it in the U.S. Senate.
Director of Government Relations Claudia Larson, also of NMPF, said that producers can access both Paycheck Protection Program and the Economic Injury Disaster Loan program. She reported that there was $148 billion remaining in PPP early in the last week of May, but people could have applied for it. She said that the Small Business Administration is working on making the loan forgiveness process easier, and hopefully Congress can change how the PPP funds can be spent. Larson passed on a tip for deriving information from websites—she suggested using the Treasury Department’s webpage, and advised simply using Google and the keywords ‘Treasury cares act small business.’ This site includes a program overview, and links for borrowers, lenders, and the rules.
The address is https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.
Matthew Gould is editor and analyst for Dairy and Food Market Analyst. Gould traced the diary situation from the end of January. He observed, “Each week seems brand new.” Just last week’s information revealed that the world changed dramatically. The volatility is unprecedented. In late January, U.S. and China problems plus China shutdowns created difficulty in getting ships. By February nonfat dry milk and whey were affected. In March the U.S. shutdown’s impact on dairy was delayed at first.
But the initial surge for food plunged, as food service quickly dropped. In two weeks cheddar cheese and butter responded— in the U.S. consumers enjoy more dairy products when eating out than at home. For example, more cheese on burgers and fries and more butter on bread characterized restaurant meals.
When restaurants closed, demand collapsed. Parmesan cheese sales evaporated. Dairy production plants shut down or reduced their schedules. School children didn’t get their carton of milk in closed schools.
But cows still produced. Gould described the result of too much milk and low demand, “dumping like crazy.” The government then intervened in the market by purchasing milk and dairy products.
Gould said that at present temporary factors are driving markets short-term. He noted, “The economy is still struggling, and people are not going out to eat.” The effects of government buying, food service sales, exports, pricing, retailer aggressive buying, and tight milk supplies likely will continue for the near-term.
Mike Hosterman of AgChoice Farm Credit joined the panelists in advising dairy producers to study the assistance programs and take care in supporting the applications. Double-dipping is generally not possible. The applications may not require documentation, but he and the panelists strongly advise retaining documentation.
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