Orion Samuelson
has been called ‘the voice of agriculture in the Midwest.” Inducted into the Radio Hall of Fame in 2003, he has now been with WGN in Chicago for 60 years. Today's featured quote is from a comment of his we found in an ABC story about U.S. farmers dumping milk they cannot sell. The caption to a picture in that story sums up one such situation this way:
Owner
Richard Azevedo
steps over the hose of a milk bulk tank as the milk is dumped down the drain, April 8, 2020, at the Azevedo family farm in Buhl, Idaho. With restaurants across the country closed, milk processors have lost a significant chunk of their market, leaving dairy farmers with no one to take their milk.
The impacts of the novel coronavirus and the policy responses to it are multifaceted and changing rapidly. Those overarching truths are valid for country after country as well as industry after industry. And they certainly apply to U.S. dairy producers. We cannot keep up with these developments much less do justice to them in these short entries. Here though are a few brief impressions from an hour or so of reading.
Across the Globe
. From S&P Global, there is this effort to provide a sense of the size the industry:
The global milk products industry generates $716 billion of revenue each year, of which $85 billion is in the U.S., according to Statista. India is the world's largest milk producer, with 22% of global production, followed by the U.S., China, Pakistan and Brazil, according to the Food and Agriculture Organization.
Money and Markets.
Our subject today, however, is the plight of dairy farmers in the United States, and here the situation is grim but complicated. It is grim because demand is way down. In early April, the National Milk Producers Federation estimated that the supply of milk exceeded demand by some 10 percent, and the situation has presumably gotten worse since. It is complicated because for many milk producers there is a lag between delivery and payments. On the plus side, many U.S. producers are still buoyed by payments from earlier sales. That anesthesia, however, will wear off soon. It is the pain of significantly reduced income in the months ahead that so many farmers are focused on. As
Alan Bjerga
of the National Milk Producers Federation explained, when dairy farmers are paid for their milk, “there’s a little bit of a lag in the price impacts that you see.” He continued:
So, when you’ve seen these plunges in milk prices in recent weeks, that hasn’t necessarily made its way to the farmer yet. And it will now be making its way to the farmer, and as milk checks start coming in, farmers are going to begin to be seeing some really important revenue losses.
This is a crucial thing to note as the USDA is looking at calculating payments to farmers under the CARES Act.* The current USDA formula is very much weighted to losses that farmers had before April 15. In the case of dairy, the concentration of losses is actually going to be after April 15 because it’s just starting to hit now. And that is something that we’re really trying to make clear with USDA when they are taking a look at this assistance as well as any future assistance … .
Alternative Outlets
– We have a lot to learn and little to say about the National School Lunch Program or any other Federal program that drives demand for dairy and other agricultural products. That said, we are grateful to the National Milk Producers Federation for drawing our attention to the
Farmers to Families Food Box Programs
. The USDA press release announcing this program begins this way:
As part of the Coronavirus Farm Assistance Program, Secretary Purdue announced on April 17 that the USDA is exercising its authority under the Families First Corona Coronavirus Response Act** to purchase and distribute up to $3 billion of agricultural products to those in need. USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase fresh produce, dairy, and meat.
Those distributors will then work with non-profits to get the food to those who need it. According to NMPF, USDA is committed to buying some $317 million in dairy products under this program.
