Just a few weeks ago, we celebrated “Memorial Day” in our country and honored military personnel who died while serving in the US Armed Forces. It is a day many hold sacred to remember the battles our country has fought for the safety and freedom of its citizens and to remember those who fought those battles to protect our inalienable rights. Some have likened the COVID-19 pandemic to our country going to war with an invisible enemy.
A popular saying sometimes used that ties back to the battleground is the phrase, “Here Comes the Cavalry.” While the word “cavalry” is technically used to describe an army unit that can be deployed quickly, the broader context of this phrase is that someone needs help and somebody else or a group of people are coming to their aid. With that in mind, you could say “Here Comes the Cavalry,” as dairy farm families struggle to work through the chaos this pandemic has created.
That “cavalry” is in the form of assistance from USDA, the Pennsylvania Department of Agriculture, Pennsylvania Milk Marketing Board, and others that now have programs in place to help farms. A cavalry can only be successful, though, if the people they are coming to protect are willing to accept that help. In other words, if you do not take advantage of the assistance available to help your dairy fight this battle, it could be at a substantial loss to your business.
The May settlement check is expected to be the lowest that dairy farmers have received in more than 10 years, well below breakeven levels for almost all dairy farms. In the May Livestock, Dairy and Poultry Outlook, USDA forecasted the all-milk price for 2020 to average just $14.55 per hundredweight, significantly below the average 2019 all-milk price of $18.59 per cwt. Prices have rebounded somewhat since that report was released. However, tremendous uncertainty still exists in the marketplace.
The volatility in the marketplace is driven primarily by the pandemic. Nobody knows for certain how quickly businesses will rebound now that they are opening again, and no one knows whether a second wave of the pandemic will arrive this fall, closing businesses again and pushing more milk back into the system.
That is why it is important for farm families to understand what is available to them and to take advantage of those programs. Here are a few programs available now and others being established to help farmers conquer the battle:
- USDA CFAP Program Direct Assistance: The Coronavirus Food Assistance Program (CFAP) includes both product purchases for the charitable food system and direct assistance to farms. The CFAP payment for dairy is estimated to be about $6.20 per cwt on first quarter production and will be distributed in two portions, with 80 percent paid upfront and 20 percent paid later. Dairy farmers can also receive direct payments on cull cows, bull calves sold to market, and feed crops. Farmers can sign up either online at farmers.gov/cfap or by calling their local USDA Farm Service Agency to apply. The Center also has a webinar recording and step-by-step directions on how to apply at centerfordairyexcellence.org/relief-payments/. If you want someone to walk you through the process, give us a call at 717-346-0849.
- US Small Business Administration Grants and Loans: In addition to the direct payments, Congress approved agricultural producers to be eligible for disaster loan programs made available through the US Small Business Administration. Those two programs are the Payroll Protection Program and the Economic Injury and Disaster Relief Program. Both are low-interest loans which may have some forgiveness of the principle available. To learn more about these programs, we recommend you call your local lender, visit sba.gov/disaster or contact us to help at 717-346-0849.
- Pennsylvania Department of Agriculture Dairy CARES Assistance Program: The Pennsylvania Department of Agriculture has announced a program to compensate Pennsylvania dairy farm families for losses they incurred due to dumped milk during the pandemic. The assistance is available both to those farms that dumped milk on the farm without being compensated for that milk and to those that received a COVID-related assessment fee on their milk check due to milk dumped within their milk market. The program offers a minimum $1,500 payment to any farm that experienced losses related to dumped milk, with additional compensation available for those farms that suffered losses greater than $1,500. To access an application, click here.
- Dairy Revenue Protection Program: While not a new program specifically related to the pandemic, the Dairy RP Program could protect your dairy against future downside volatility in the marketplace. The program offers market-based price coverage for the next five quarters, from the third quarter of 2020 through the third quarter of 2021, and puts a floor under your milk price. Zach Myers from our team can help you better understand this program, which is available through authorized crop insurance agents. Call Zach at 717-346-0849 or email him at zmyers@centerfordairyexcellence.org to learn more or visit USDA’s web page on the Dairy Revenue Protection Program.
- Center for Dairy Excellence COVID-19 Assistance Grants: Outside of financial losses, many farms experienced additional costs due to the COVID-19 pandemic. It may have been the cost of printing posters and other information to encourage social distancing, masks and other personal protection equipment to protect employees, or thermometers and other surveillance tools to mitigate any spread of the virus. The Center is offering grants of up to $1,000 for farms to be reimbursed for those costs. However, the deadline to apply is June 24, 2020. Interested farms should apply as soon as possible. Go to centerfordairyexcellence.org/covid-grants/ and submit your application today.
One of the best aspects of this industry, I believe, is the people who dedicate their time and energy to helping our dairy farms and the broader dairy community succeed. Along with the programs above, so many others have stepped up to help work through this battle. Businesses have donated money to move milk into the charitable food system; individuals are helping farm families develop contingency plans and fill out the paperwork to get the assistance available; local community members are asking how and where to buy local milk and dairy products. We are so fortunate to have such a strong community supporting dairy. Just remember, “the cavalry is here,” but it is up to you to let them help.
For more information about Center programs or for assistance in navigating the help that is available, contact us at 717-346-0849 or email us at info@centerfordairyexcellence.org.
Editor’s Note: This column is written by Jayne Sebright, executive director for the Center for Dairy Excellence, and published monthly in the Lancaster Farming Dairy Reporter.