Dairy Industry Has Mixed Reaction to Second Trade Mitigation Payments

A national dairy group and Midwestern cooperative have mixed feelings about the additional Market Facilitation Program (MFP) payments that are being offered. ( Wyatt Bechtel )

The Trump Administration approved another round of relief payments to aid farmers during a trade battle with China, but the response has been mixed among dairy groups representing producers.

USDA was authorized to for a second set of Market Facilitation Program (MFP) payments on Dec. 17 by President Trump after he made the announcement via Twitter.

The National Milk Producers Federation (NMPF) welcomes the additional aid, but is concerned with the level of payment.

“The tariff-mitigation payment for dairy farmers in this second round of payments is less than we had hoped for, but it will provide some assistance during difficult times,” says NMPF President and CEO Jim Mulhern.

Midwestern-based FarmFirst Dairy Cooperative was more disturbed with the lack of financial aid the tariff relief program offers.

“FarmFirst Dairy Cooperative was hopeful that the administration would heed our concerns for these trade mitigation payments to more accurately reflect the costs dairy farmers are experiencing due to this trade war. However, we acknowledge their effort to help offset these losses,” says Jeff Lyon, General Manager of FarmFirst Dairy Cooperative.

Dairy producers are eligible for $0.12/cwt. of 50% of their milk production and the money is being pulled from a $254,800,000 payment pool. The most a farm can receive is $125,000. The payment program could also see a delay if the government is shutdown.

Both NMPF and FarmFirst Dairy Cooperative expressed hope that the Trump Administration would come to a resolution with China and other countries such as Mexico that are important to dairy trade.

“The tit-for-tat tariffs that prompted these mitigation payments continue to inflict damage across the farm economy. We urge the Administration to resolve tensions with key trading partners, including China and Mexico, as the best way to assist farmers going forward,” Mulhern says.

“We ask that the administration quickly resolve the trade conflict that exists between U.S. trading partners, China and Mexico, and quickly lift the retaliatory tariffs currently in place as they continue to challenge dairy markets,” Lyon says.

Approximately 14,200 dairy farmers who participated in the first round of MFP received payments by Oct. 31. The highest level of payment was $140,804 and the lowest was just $2. Dairy farmers were slated to receive $127 million in direct tariff relief during the first round of MFP payments, less than a tenth of the market losses expected through the end of the year. USDA has also committed to spend another $84.9 million in dairy food purchases to help bolster milk prices. So the total dairy aid package comes to $212 million.

Despite the frustration expressed regarding trade the dairy groups are optimistic that the farm bill will help provide more support to dairy farmers.

“With the anticipated passage of the 2018 Farm Bill, we are confident we are headed into the right direction to make some meaningful reforms that will positively impact dairy farmers for 2019,” Lyon says.

Mulhern adds, “We are thankful that Congress last week emphatically supported milk producers and all of U.S. agriculture by passing a farm bill that will provide timely, critical assistance. We look forward to the president signing the bill and appreciate that USDA has highlighted implementation of the new dairy program as an early priority.”

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