LEGISLATIVE UPDATE April 6, 2020
Many of the House and Senate committees met last week and will continue to meet this week, the schedule can be found on the legislature website and you may listen or watch through YouTube, the information is on each committee’s page. Again, the focus of the committee work is supposed to be COVID-19 crisis related and how the state and local governments manage. The Statehouse is closed to the public until further notice.
There are a lot of things that can be done, and a number of actions are in the works. First of all, on the financial side the Dairy Margin Coverage Program (DMC) can be re-opened and dairy producers who didn’t sign up for 2020 can now have the option of doing so. Many did not sign up for 2020 as price forecasts in December were very good projecting at $19.50 per hundredweight on average for this year. However, in the last few weeks these projections have dropped appreciably as mentioned earlier to as low as $16.40 per hundredweight Given the forecasts for low farm milk prices it is expected that DMC payments will likely be made from March through December of this year. However, these payments will not cover the losses that many dairy producers may be facing in the months ahead. For example, a 200-cow dairy making 4.5 million pounds of milk annually could receive about $18,000 in DMC payments but lose about $100,000 in total receipts with milk prices at $16.40 per hundredweight. The Commodity Credit Corporation (CCC) can purchase excess dairy products off the market and Section 32 The Emergency Food Assistance Program (TFAP) providing donations to food banks are two efforts that would be helpful in removing excess dairy products off the domestic market. This would, of course, take the pressure off of pushing farm milk prices further downward. Another idea that is not embraced by everyone is some sort of a direct payment to dairy producers by USDA to lift the price of milk close to $19.00 per hundredweight. Other ideas are being explored as well.