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AFBF explains dairy assistance request

Hallie the cow 16WIS SFFarm organizations recently asked Ag Secretary Tom Vilsack to assist struggling dairy farmers by purchasing cheese, but the groups don’t agree on how much to buy.

The National Milk Producers Federation encouraged Vilsack to buy between 100 and 150 million dollars’ worth of dairy products for schools and pantries.  American Farm Bureau Federation suggested about 50 million dollars’ worth.

AFBF’s Director of Market Intelligence Dr. John Newton says it’s important to provide some assistance to dairy farmers, but also limit the impact that assistance would have on the market. “The United States dairy producers export a large volume of cheeses all across the globe, and we want to make sure that whatever intervention is done in in the markets that it doesn’t significantly disrupt our ability to competitively export.  That’s why we felt that 28 million pounds of cheese was a reasonable number, a number that could help remove some of the burdensome inventory levels that we do have of American-type cheese.”

Some assistance is on the way, as the USDA already announced dairy farmers in the Margin Protection Program (MPP) will be paid between 6 and 8 dollars per hundredweight for May & June production.   Dr. Newton says roughly 11 million dollars will go out to about 4-5 thousand producers that enrolled.

There has been some hope for dairy farmers with slight gains in the milk futures market, but Newton says producers still need to be cautious.  “We hope that the markets are right.  One thing that I’ve learned in years of studying the futures markets is they’re always wrong, so while prices have improved in recent months, we still have a long six months left of the year.  We need to get through the school season.  We need to get through Labor Day.  We still have 4th quarter butter inventories to monitor, so there’s still a lot of uncertainty in the market.”

Newton says ultimately, it will come down to USDA and what they believe is the best action within their authority to help dairy farmers.

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