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Struggling Dairy Farmers to Receive One-Time Direct Payment

posted on December 17, 2009

The popular, "Got Milk?" advertising campaign employed by the U.S. dairy industry for the past eight years has been credited with increasing dairy prices nationwide. These days though, asking producers if they've "got milk" may be adding insult to injury.

Prior to the global recession, growing demand in developing nations drove up milk prices, and prompted dairy producers to expand their herds. But now, the export market has all but gone dry, and prices paid to producers, in most cases, are well below the cost of production.

In October, Congress approved a $350 million emergency funding bill for dairy producers, and this week, the Agriculture Department announced help is on its way.

Struggling Dairy Farmers to Receive One-Time Direct Payment

Earlier this year, Congress approved $350 million to help the dairy industry, which has been hammered by the recession. $60 million was set aside to cover purchases of surplus cheese and other dairy products, but USDA was given wide discretion with the remaining $290 million.

Under the Dairy Economic Loss Assistance Payment program, USDA announced this week eligible dairy farmers will receive a one-time direct payment that is based on the amount of milk that was produced and commercially marketed by their operations between February and July 2009. Milk producers that qualify will receive about 32 cents per hundredweight, according to the Agriculture Department, with a limit per dairy operation of 6 million pounds. A producer reaching the maximum limit would receive about $19,000.

Milk prices are forecast to average $12.75 per hundredweight this year, nearly 30 percent below their average in 2008.


Tags: agriculture Congress dairy economy government industry milk money news USDA Washington