Dairy farmers who saw their milk checks reduced due to volatility caused by the COVID-19 pandemic can receive additional assistance through a new program announced this week by the U.S. Department of Agriculture. At the same time, the agency is making retroactive tweaks to its dairy safety net program that will result in additional support for producers.
The $350 million Pandemic Market Volatility Assistance Program will reimburse eligible dairy producers up to 80 percent of the revenue loss per month based on an annual production of up to 5 million pounds and on fluid milk sales from July through December 2020. The payment rate will vary by region based on the actual losses on pooled milk.
Producers will not need to apply for the payments. Instead, payments will be made directly to independent milk handlers and cooperatives, who will then distribute the funds to producers within 30 days based on guidance from USDA.
At the same time, USDA is making changes to its Dairy Margin Coverage program, which will be retroactive to January 2020. These changes include updating the feed cost formula to better reflect prices paid for high quality alfalfa.
Because the change is retroactive, farmers who already participate in the program will receive a combined $100 million in retroactive payments for 2020 and 2021. Going forward, USDA estimates the change will provide, on average, an additional $80 million per year in aggregate support for dairy producers.