ST. PAUL — Minnesota Milk’s board of directors is endorsing a Dairy CORE (COronavirus REcovery) program to quickly provide aid to the industry in an effort to right-size the new supply reality. Working from a proposal created by National Milk Producers Federation and International Dairy Foods Association, Minnesota Milk sought to expedite aid, eliminate regional and seasonal disparities and limit market distortion while simultaneously adjusting supply appropriately. The program is supported by Rep. Collin Peterson and was presented to USDA.
“We need to be very careful we do not create more problems than we solve,” explained Garrett Luthens, Minnesota Milk Policy Chair, of Hutchinson. “By administering payments based on a historical number, keeping logistics simple and ensuring we are not altering any pre-planned marketing strategies, we believe the Dairy CORE Program is a good addition...”
“Dairy farmers are hurting,” stated Dave Buck, Minnesota Milk President, of Goodhue. “At the same time, our creameries cannot afford to pay more. With exports, food service and schools all operating under significantly different methods worldwide, the demand is simply not there for some dairy products. Many cooperatives and processors need to significantly alter their supply planning, and this direct payment will allow them the time and flexibility to do so.”
Due to the current economics in the dairy industry, the prediction is that many dairies won't survive until May or June. Schools, food service and exports are all down substantially, while grocery store sales initially rose and have since returned to pre-coronavirus levels. The proposed Dairy Coronavirus Recovery (CORE) Program seeks $9 per hundredweight based on March milk production, to provide an immediate infusion to every dairy farmer in the U.S. without distorting the market.
The dairy industry will be affected for at least an entire quarter, making the equivalent of $3 per hundredweight by three months an appropriate starting point for aid. (Example: a producer who shipped 1 million pounds (10,000 hundredweight) in March would receive one lump sum payment of 3 x $3/cwt x 10,000 cwt = $90,000). The program requests the financial aid be paid to producers in one lump sum this month.
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Minnesota Milk encourages dairy producers to contact their senators, as well as Senate Ag Leadership: Sen. Pat Roberts and Sen. Debbie Stabenow. The U.S. Capitol switchboard will connect you when you call (202) 224-3121.
“We first encourage USDA Secretary Sonny Perdue to explore a Dairy CORE type program through the $9.5 billion in discretionary funding he received through the CARES Act,” said Minnesota Milk executive director Lucas Sjostrom. “While no one can be sure of the future of the milk and cattle markets that affected dairy farmers over the previous few weeks, it is clear our creameries need time to adjust supply. A $3 x three-month payment seems both appropriate and necessary, and we encourage the Secretary to act immediately.
“Please call your U.S. senators and tell them to support the Dairy Core program,” Sjostrom added.
