New USDA food purchases not as disruptive for dairy

Ag economist Nate Donnay with StoneX estimates about 20 percent of the new billion-dollar Emergency Food Assistance Program purchases will be used for dairy products which would total about $136 million.

While details of the program are limited, his analysis takes the purchases through the end of the year and says this program is modest compared to the food box program which invested more than $500 million over the past six months into dairy product purchases.

Donnay is expecting dairy markets to tighten some but believes it will not be disruptive to markets as its predecessor.

He expects one percent of the total milk production to move toward government programs in the second half of 2021, supporting prices by about 6.5 to 10 percent through the end of the year.

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