Extra billions package for US dairy farmers

There is a second round of the US Coronavirus Food Assistance Program (CFAP). This was announced by President Trump and Secretary of Agriculture Sonny Perdue last Friday (September 18). What does this mean for American dairy farmers?

In total, the US government is making $14 billion available to affected entrepreneurs. This is a generous addition to the aid package presented at the start of the corona crisis that went to food-producing companies around $24 billion. The money is intended to guide agricultural entrepreneurs and processors through the crisis with as little damage as possible. What do the dairy farmers get from this?

Support for dairy farmers
In the first support package in May $9,5 billion was set aside for dairy farmers and parties in the dairy chain. With the second round of the CFAP, also known as CFAP2.0, dairy farmers, among others, are once again eligible for extra support. The payout can be calculated in 2 different ways.

First, the dairy farmer's total actual milk production between April 1, 2020 and August 31, 2020 can be multiplied by $1,20 per cwt (1 cwt is approximately 50,8 kilograms). A second variation is the estimated milk production from September 1, 2020 to December 31, 2020, based on the average daily production from April 1, 31 to August 2020, 122. This is multiplied by 1,20, then the answer is multiplied by a payment rate of $XNUMX per cwt . 

Limit and requirements
Dairy farmers should note that there is a limit of $250.000 per payout. The Ministry of Agriculture does not want to encourage a production increase with falling milk prices in 2021 as a result.

In order to receive part of the funds, the company must produce and market milk at the time of application. If the dairy farm stopped after September 1, 2020, it is eligible for a supplementary payment for the days it still markets milk between September 1, 2020 and December 31, 2020. If the dairy farmer has resigned before September 1, 2020 then he is not eligible for aid.

Jorine Cosse

Editor at Boerenbusiness who studies the dairy, pig (meat) and feed markets. Jorine analyzes the roughage market on a weekly basis and periodically the compound feed market.

j.cosse@boerenbusiness. Nl

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