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What’s happening right now in the dairy sector is the equivalent of the Titanic slamming into an iceberg. The problem is, instead of trying to patch the hole and save the ship, the U.S. Department of Agriculture is investing in new lifeboat cushions due to insufficient resources.

The USDA’s much-trumpeted $2.9 billion bailout for the dairy industry basically ignores the farms that are most critical to maintaining the national milk supply.

Recent news reports claim that USDA officials will purposely misappropriate distributions to large dairies, leaving many of the country’s top milk producers teetering on the edge of collapse.

Considering that the U.S. Small Business Association says a small business, depending on your industry, could be defined as a maximum of 250 employees or a maximum of 1,500 – depending on your industry – you have to wonder what the USDA is thinking and who is exactly crunching their numbers.

The general rule of thumb is one employee per every 100 cows, so to even reach the low end of the small business employee limit, a single farm would have to be home to 25,000 cows. That is simply not reality.

These “larger” family farms are really small businesses in every sense of the word, but the USDA seems to be playing politics with them and the futures of all the families who have members working at these farms.

It won’t take much to cause a landslide. Once just a handful of these farms go under, the damage to the country’s food chain will be immediate and devastating. Shortages of vital dietary foods — cheese, butter, etc. — will be everywhere. Parents who have never given a second thought to the abundance of food at their local grocery store will, for the first time, send their children to bed hungry.

The USDA must not implement payment caps. In virtually every other sector — be it banking, airlines, manufacturing, etc. — federal aid has been based on COVID-19’s impact on the business and national security. Only agriculture has been subject to payment caps regardless of financial ruin caused by the virus.

The implications of this policy, if moved to fruition, is frightening. The New York Times recently summed it up in a single headline: “’Instead of Coronavirus, the Hunger Will Kill Us All.’ A Global Food Crisis Looms.” All farms together are the reason for the surrounding infrastructure in an area – processors, truckers, crop farmers – and once the farms, no matter the size, start to fall, all of these other nearby “small businesses” will start to hear their own death knell.

The federal government cannot make the audacious gamble that it can sustain the dairy industry and ignore the anchoring farms. Even the most cursory observer knows it’s an unsustainable option. The coronavirus will likely be the killing stroke to wide swaths of dairy that had not yet recovered from a 5-year downturn, fueled by trade wars and surging tariffs.

“About half the cheese we make in this country … 60 percent of the butter and about a quarter of the fluid milk goes into away-from-home outlets that have either entirely or mostly collapsed right now,” notes Paul Bleiberg, vice president of government affairs for the National Milk Producers Federation.

In the U.S. alone, the number of people already classified as “food insecure” is 37 million — about one in 10 Americans. That number is about to get a lot worse, unless Washington’s decision makers begin steering aid to the farms, regardless of size, best positioned to protect America’s food supply lines. 

Fischer is the CEO of the American Dairy Coalition

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