Wisconsin Ag Connection - Support a Dairy Recovery Plan That Works

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Support a Dairy Recovery Plan That Works
By: Laurie Fischer, CEO of American Dairy Coalition - 04/09/2020

Hundreds of dairy advocates and associations are flooding the USDA with pitches and proposals for shoring up our COVID-19 ravaged industry. At stake is the $9.5 billion in discretionary money in the CARES Act that Sec. Sonny Perdue will deploy on behalf of the nation's agriculture sector.

While we applaud all who are putting forth rescue and recovery ideas for our battered farms, good intentions do not always translate into good results. That's why we strongly support the Minnesota Milk Producers Association’s proposed Dairy CORE Program, which emerges as a clear-headed and effective response that could provide the foundation for a strong federal stimulus.

The CORE plan offers an immediate lifeline to battered dairymen, allows for adaptability in the production process and protects the market forces that will need to be in place when the coronavirus pandemic is over.

Among the CORE proposals:

* Instruct the USDA to pay U.S. dairy producers $3/cwt for 100 percent of their March 2020 baseline, for each of the months in the second quarter of the year, irrespective of market prices. The payment would be done as a single lumpsum payment in April.

For instance, a producer that shipped 1 million lbs. (10,000 cwt) would receive one payment of 3 X $3/cwt for $90,000, authorized directly by the Secretary of Agriculture, and disbursed with minimum delay.

In June, the situation would be assessed again to evaluate if another round is needed for July-September.

* Do not condition direct payments on arbitrary, top-down, one-size-fits-all production cutbacks. Instead encourage producer-owned cooperatives and private milk buyers to develop supply adjustment incentive programs, which are most appropriate for their supply/demand situation.

If creameries are assured their producers have received a large, one-off direct payment, they will be more empowered to implement situation-adjusted, effective marginal incentives to right-size their milk supply.

Instead of reopening 2020 signup for Dairy Margin Coverage or compensating processors for dumped milk, concentrate stimulus funds to a single, large lumpsum payment directly paid to each U.S. dairy producer.

* The goal is to sustain as many of our nation's dairy farms as possible even as we work toward returning the industry to its supply equilibrium as quickly and with as little disruption as possible. The MMPA's Dairy Core Program offers a roadmap to recovery that is flexible, measurable and achievable.

The American Dairy Coalition asks for your support of this CORE Program, so that it can be implemented as quickly as possible.

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