The U.S. dairy sector will receive a total of $2 billion in compensation for the consequences of the corona crisis, reports the USDA Department of Agriculture. $350 million will be released in the short term, specifically offsetting smaller dairies.
This concerns price compensation for the low milk prices in the second half of 2020, when the lockdowns and other corona measures severely disrupted the American dairy market. According to Tom Vilsack, the US Secretary of Agriculture, this is the "first step" towards a total package of $2 billion to "support the dairy sector in recovering from the corona pandemic and to be more resilient to future challenges".
The compensation is 80% of the income difference per month from July to December last year, based on an annual production of up to 5 million gallons (19.500 tons). This is approximately the milk produced by a dairy farm of 210 cows, US media writes. The payment of the compensation goes through the milk buyers, the USDA said.
closing the gap
The American Federation of Dairy Farmers (NMPF) thinks the specific payment of $350 million in price compensation is still too little. The organization has calculated that dairy farmers have suffered $750 million in damage due to the price volatility under the corona policy of then-President Donald Trump. "We are going to consult with the government to see how we can further close the gap."
The compensation comes in addition to other schemes that support the U.S. dairy sector, such as $400 million worth of dairy products for food banks and a $580 million fund for small and medium sized dairy farms.
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