The National Milk Producers Federation and International Dairy Foods Association are jointly asking USDA to rescue the industry from the impact of the COVID-19 pandemic by paying farms to cut production and providing forgivable loans to processors to keep buying milk Agri-Pulse reports.
Under the Milk Crisis Plan, producers would be paid $3 per underweight on 90% of their production if they cut production by10% from March 2020 levels. The program would run from April through September.
Processors would get forgivable loans similar to loans being provided to small businesses under the Paycheck Protection Program.
The loans would be forgiven if the processors continue to purchase milk from producers and maintain company staffing.
“Collapse of the food service industry, massive economic insecurity, export disruptions, and seasonally rising milk supply creating a massive gap between dairy supply and demand,” the plan says.
It is currently estimated that there is a 10% excess in supply versus demand and that gap could continue to grow as shelter-in-place continues.
Additional recommendations include proposals to compensate producers and handlers for milk that must be dumped of because of supply chain disruptions and buying milk for federal feeding programs.
The organizations are asking the USDA to eliminate restrictions in the Womer, Infants, and Children nutrition program on all fat levels of milk through the rest of the year. The organizations also want the School feeding programs to continue operating under the Summer Food Service Program rules that permit all fat levels of milk and serving sizes larger than eight ounces.
The plan also asks USDA to reopen enrollment in the Dairy Margin Coverage, a step NMPF had requested earlier.