USDA Unveils More Dairy Aid, But Still No Formal Action on Dairy Donation Program
$350 million in pandemic aid payments to dairy farmers via PMVAP
USDA Secretary Tom Vilsack today announced the Pandemic Market Volatility Assistance Program (PMVAP) while in Vermont with Sen. Pat Leahy (D-Vt.).
Under the PMVAP, USDA will provide about $350 million in pandemic assistance payments to dairy farmers who received a lower value for their products due pandemic, part of an effort which includes permanent changes to the Dairy Margin Coverage (DMC) program.
PMVAP will reimburse qualified dairy farmers for 80% of the revenue difference per month based on an annual production of up to 5 million pounds of milk marketed and on fluid milk sales from July-December 2020. Payment rates will vary by region and will be based on the actual losses on pooled milk related to price volatility. Payments will be made through agreements with independent handlers and cooperatives on the same basis that payments for July-December 2020 were made to dairy farmer suppliers using a USDA formula. USDA will reimburse handlers and cooperatives for allowed administrative costs.
Eligible handlers and coops will be notified of the opportunity to participate in PMVAP and USDA will provide payments to them within 60 days after finalizing an agreement. Handlers will then be given 30 days to send funds to qualifying dairy farmers.
Handlers also will provide virtual or in-person education to dairy farmers on a variety of dairy topics available from USDA or other sources, with a requirement to provide the info to farmers by March 1, 2022.
USDA said the PMVAP effort is part of $6 billion in pandemic assistance initially announced in March, which included $400 million for a new Dairy Donation Program to address food insecurity and mitigate food waste and loss; and $580 million for Supplemental Dairy Margin Coverage (DMC) for small and medium farms. The latter have not yet been detailed in terms of operation or timing.
USDA also announced it was adjusting DMC to update the feed cost formula to better reflect the actual cost dairy farmers pay for high quality alfalfa. The DMC change will be retroactive to January 2020 and will result in about $100 million in additional payments to DMC participants for 2020 and 2021. The change will permanently be applied so it will add an average of $80 million annually — approximately $800 million over 10 years — relative to dairy programs relative to the next U.S. farm bill. But USDA said that full details on this and other actions will be provided once regs are published in the coming weeks.
Comments: While the Office of Management and Budget (OMB) completed its review of the DDP regulation Aug. 5, USDA did not announce any additional actions under that $400 million effort. Also absent was any more details on the supplemental DMC payments which are separate from the action on the feed cost side.
