CFAP: How payments are made to dairy producers and reaction from industry leaders


U.S. Secretary of Agriculture Sonny Perdue has announced the details of the Coronavirus Food Assistance Program, which will provide $16 billion in payments to America’s farmers and ranchers.

The payments from the program will go directly to farmers who have suffered a 5 percent or greater price loss and who are facing significant marketing costs due to the coronavirus. Eligible commodities include cattle, hog, dairy, specialty crops and row crops. Payments will be capped at $250,000. Additionally, there is a $900,000 adjusted gross income limit for individuals who do not get more than 75 percent of their income from farming.

Eligible farmers will receive 80 percent of the total payment upon approval of the application. The remaining 20 percent will be paid at a later date as funds remain available.

For dairy producers specifically, they will be paid according to certification of milk production for the first quarter of calendar year 2020 multiplied by a national price decline during the same quarter. Additionally, payment is based a national adjustment to each producer’s first-quarter production.

“We welcome this federal dairy assistance, which is critically needed as the nation’s dairy farmers face an unprecedented market collapse,” said Jim Mulhern, president and CEO of NMPF, the largest U.S. dairy-farmer organization. “USDA’s plan will provide relief to many farmers, and we appreciate the department’s adjustments to payment limits, an issue which we raised prior to the department finalizing this package.

“Even so, we believe more flexibility in payment limits and some changes to payment calculations will be needed in future rounds of funding to meet the unprecedented challenges faced by producers of all sizes, in dairy and throughout agriculture. We look forward to working with federal officials and lawmakers on additional assistance.”

Mulhern also called on Congress to act in a bipartisan manner to enact more robust aid for America’s dairy producers.