Dairies are getting federal money in response to COVID-19--but it may not be enough

Posted at 3:42 PM, Apr 28, 2020
and last updated 2020-04-28 19:53:54-04

The U.S.D.A. is putting $19 billion toward the Coronavirus Food Assistance Program (CFAP), which helps support farmers across the nation struggling from the impacts of COVID-19, but the Idaho Dairymen's Association says limitations within the program mean a big chunk of Idaho's dairies will get shortchanged.

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For dairies, dropping demand and sinking prices have left many worried about being able to pay the bills. In the dairy industry, milk is priced per hundred pounds--or hundredweight. For the dairies to produce milk, it costs about $16 a hundredweight--but the price it's being sold for is $10 a hundredweight.

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"They just don't come close to covering the bills," said Rick Naerebout, CEO of the Idaho Dairymen's Association. "They're going to be faced with a lot of difficult decisions on 'How do you pay your workers? How do you pay for your utilities? How do you pay for all these other things that the milk check is just not covering anymore?'"

Direct payments from CFAP are meant to help those struggling farmers stay in business, but according to the CFAP summary released by USDA, producers will be eligible for no more than $125,000 per commodity, with an overall limit of $250,000 per individual or entity.

"If your competitor is milking 80 cows and they get 125 thousand, and you're milking 800 cows and you get that same 125 thousand, it doesn't go near as far on a larger dairy operation as it does on a smaller dairy operation," said Naerebout.

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Naerebout says the average dairy farm in Idaho has about 1,500 cows, but the average nationally is only about 250 cows.

"For us in Idaho and other western states where our average herd size is larger, it's frustrating that our dairymen and our rural communities are being shortchanged by this program because they capped it and they're not making it equitable across all size dairies and all size farms," Naerebout said.

Idaho's entire agriculture industry has been hit hard by the pandemic, to the point many have had to dump product--including thousands of gallons of milk, and thousands of pounds of onions and potatoes.

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"The more you produce right now, the more you lose," Naerebout said. "Every farmer out there, whether you're farming potatoes or cows or vegetables, every acre you farm, every cow you milk you're losing money on that animal or on that acre. The more you have, the more you're losing."

Naerebout says the impacts are statewide.

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"It's the rural communities that our economy is built on in Idaho. We produce food in Idaho," Naerebout said. "It impacts the entire state."

In response to the summary, Congressman Mike Simpson co-led a bipartisan letter signed by 126 members in the U.S. House of Representatives, including Congressman Russ Fulcher. Senators Mike Crapo and James Risch joined the same effort in the U.S. Senate requesting the President to eliminate payment limits for specialty crop, livestock, and dairy producers before the final CFAP details are announced.

The members wrote, “…We are concerned about the $125,000 per commodity and $250,000 per individual or entity payment limits as it relates to assistance for the livestock, dairy and specialty crop sectors. This limitation would severely restrict the program’s effectiveness for many family-owned farms and ranches across the nation. We strongly urge you to eliminate payment limits for livestock, dairy and specialty crop producers before the final CFAP program details are announced.”

“Idaho’s farmers and producers continue suffering from the unprecedented devastation led by the coronavirus pandemic. They have had to dump thousands of gallons of milk as well as thousands of pounds of onions and potatoes, just to name a few,” said Senator Mike Crapo. “While I applaud the USDA’s efforts to get much-needed financial support to our producers, I urge the Administration to consider the impacts that payment limitations will have on Idaho’s farmers and ranchers. I will continue to work with USDA and my colleagues in Congress to support the agricultural industry through this challenging time of COVID-19.”

“Idaho’s farmers and ranchers face unprecedented difficulties every single day the COVID-19 pandemic continues, and our food producers need relief that fits Idaho’s unique farming landscape. Our agricultural industry has completely different market factors than other parts of the country, and our family farms and ranches should not be penalized for adapting,” said Senator James Risch. “I’m glad to join my colleagues in asking the USDA for comprehensive assistance for the men and women who keep food on the dinner tables for families across America, and look forward to working with the administration to ensure Idaho’s producers get the support they need.”

“It isn’t a secret that food producers across the country have been hit especially hard by the unprecedented and necessary measures our country has taken to combat COVID-19. The slow down in the food service industry has decimated markets for crops that are already planted and have nowhere else to go. In Idaho, agriculture is 20 percent of our economy and limiting the amount of assistance we can provide farmers and ranchers simply won’t be enough to save their operations. These family run farms are the fabric of our communities in Idaho and I hope this letter helps the Administration and USDA better understand the impacts payment limitations will have on rural America,” said Congressman Mike Simpson. “I stand ready to work with my colleagues in Congress to provide USDA the resources they need to help the agriculture community without payment limitations.”

“Idaho’s farmers and ranchers have seen their markets disappear during the COVID-19 outbreak. Throughout Idaho, crops, milk, and meat are being dumped or going unused. To assist our farmers and ranchers, Congress passed the CARES Act to provide assistance to Idaho’s family farms, but limitations have been put on these assistance efforts,” said Congressman Russ Fulcher. “To try and highlight some of these issues, I joined many of my colleagues in Congress to lift these limitations so Idaho can benefit from this assistance.”

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