American dairy farmers are asking for additional help from the federal government to survive record low milk prices.
The American Farm Bureau Federation (AFBF), which represents farmers and ranchers all around the country, wrote to Secretary of Agriculture Tom Vilsack Aug. 8 requesting that the U.S. Department of Agriculture (USDA) “consider options to ensure dairy producers will receive assistance in the short term.”
“The decline in dairy farm revenue has led many dairy farm families to exit the industry,” AFBF President Zippy Duvall wrote. Over 1,000 small farms closed in 2015, Duvall said.
Specifically, Duvall asked the secretary to buy the excess milk farmers have produced under “section 32,” a USDA fund that sets aside about $9 million a year “to support the farm sector through the purchase of surplus commodities.”
“If the Department spent $50 million, it could purchase 28 million pounds of cheese for domestic feeding programs,” Duvall wrote. When the USDA purchases food under section 32, it typically goes into food banks and is distributed to needy families. America’s so-called cheese stockpile reached an astounding 1.19 billion pounds in April.
Last week, 61 members of Congress wrote to Secretary Vilsack on behalf of dairy farmers, requesting the USDA “take action to protect all of our nation’s dairy farmers from further crisis and to aid in the expansion and maintenance of domestic markets.” (RELATED: Congress Asks USDA To Bail Out Dairy Industry)
The USDA responded with $11.2 million in “safety net assistance” for dairy farmers in the Margin Protection Program, which offers subsidies when milk prices drop to a certain percentage.
The 2014 Farm Bill eliminated direct subsidies for the milk, and started a marginal protection program of crop insurance. The dairy industry is still adjusting to the Margin Protection Program for Dairy, enacted by the 2014 Farm Bill, which replaced subsidies. Marginal dairy insurance “provides financial assistance to participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the producer,” according to the USDA.
The AFBF’s letter noted the $11.2 million of insurance, but said more needs to be done, as farmers won’t slow milk production anytime soon. “Despite the difficult financial performance in the dairy industry, milk production in the U.S. has not declined,” Duvall wrote.
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