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Dairy industry stakeholders applauded the USDA for ensuring milk producers dumping milk due to recent market disruptions caused by the coronavirus pandemic aren't penalized.

USDA’s Risk Management Agency (RMA) is allowing discarded milk to be counted toward milk marketings for the Dairy Revenue Production (DRP) or as actual marketings for the Livestock Gross Margin for Dairy (LGM-Dairy) programs. 

That decision will allow dairy farmers participating in those risk management programs not to lose coverage on any milk that can’t be marketed and will be helpful in mitigating some of the catastrophic damage many dairies are facing due to supply-chain disruption caused by the coronavirus crisis.

“The market realities of the COVID-19 era demand solutions, and USDA’s decision is a balm for thousands of dairy farmers participating in these important risk-management programs,” NMPF President and CEO Jim Mulhern.

Last week, several dairy industry organizations reached out to the federal government seeking assistance for the state's dairy industry that has been hit hard with an economic downturn since 2015.

This month, many dairy farms have been asked by their cooperatives to dump milk down the drain or reduce their milk production to address the surplus of milk.

This group has asked the USDA to help purchase the some of the milk, butter, and cheese in bulk formats or to be distributed to restaurants and food vendor services.

NMPF and the International Dairy Foods Association has also sent a joint plan to the USDA to consider further actions to help provide immediate relief for all dairy farmers.

Other measures the RMA is taking include:

  • Allowing phone and electronic transactions for 2021 crop year sales and reporting dates, including options and endorsements;
  • Extending the deadline for some perennial crop Pre-Acceptance Inspection Reports (PAIRs);
  • Waiving the 2021 crop year inspection requirements for the Nursery and Nursery Value Select (NVS) programs in certain cases.

“Dairy Revenue Protection is a vital risk management tool for our dairy farmers, especially during times like these, and USDA wants to ensure producers continue to get the coverage they purchased. RMA is making some further adjustments to assist the crop insurance industry and America’s farmers and ranchers,” RMA Administrator Martin Barbre said. “We will continue to make adjustments as needed to ensure that the Federal crop insurance program continues to serve the risk management needs of our nation’s producers during this unprecedented time.”

Adjustments for dumped milk

COVID-19 shutdowns have caused disruption in the milk market, and dairy producers are dumping milk as a result. For the 2020 calendar year, RMA is allowing Approved Insurance Providers (AIPs) to count dumped milk toward the milk marketings for the DRP or actual marketings for the LGM-Dairy programs regardless of whether the milk was sold. Producers will still have to provide to the AIPs supporting documentation from the cooperative or milk handler verifying the actual pounds dumped and that the milk was dumped.

NMPF and the International Dairy Foods Association has also sent a joint plan to the USDA to consider further actions to help provide immediate relief for all dairy farmers.

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