USDA adds $80m funding to support dairy industry and gives out pandemic assistance cash

By Jim Cornall

- Last updated on GMT

The USDA is also disbursing funds to the dairy industry through the Pandemic Market Volatility Assistance Program (PMVAP). Pic: Getty Images/stu99
The USDA is also disbursing funds to the dairy industry through the Pandemic Market Volatility Assistance Program (PMVAP). Pic: Getty Images/stu99

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The U.S. Department of Agriculture (USDA) has announced an additional investment of $80m in Dairy Business Innovation (DBI) Initiatives.

In November 2021, DBI awarded $18.4m to three current Initiatives at University of Tennessee, Vermont Agency for Food and Marketing and University of Wisconsin, and $1.8m to a new initiative at California State University Fresno. Under the existing DBI program, which was previously announced through a FY21 Request for Applications (RFA), each Initiative will now have the opportunity to submit additional proposals for up to $20m in American Rescue Plan funds to further support processing capacity expansion, on-farm improvements, and technical assistance to producers.

“The pandemic has demonstrated that dairy producers and regional dairy processors, particularly those engaged in value-added production, faced systemic shocks over the past several years,”​ said Agriculture Secretary Tom Vilsack.

“We have heard directly from producers and processors – particularly organic producers and processors in the Northeast – on how we can work with the industry to build long-term resilience of regional dairy supply chains. The Dairy Business Innovation Initiatives have supported regional-focused efforts tailored to the needs of dairy farmers and businesses locally. This additional funding will expand the capacity of the four initiatives to provide technical assistance and sub-grants exponentially.”

Since its inception in 2019, DBI initiatives have provided technical assistance and sub-grants to dairy farmers and businesses across their regions, assisting with business plan development, marketing and branding, as well as increasing access to innovative production and processing techniques to support the development of value-added products. Separate from this supplemental ARP funding, AMS plans to announce a new DBI Request for Applications later in FY22 contingent upon appropriations.

AMS supports US food and agricultural products market opportunities, while increasing consumer access to fresh, healthy foods through applied research, technical services, and Congressionally-funded grants.

“This is a historic investment in dairy businesses, and so vital at a time of trade volatility, labor shortages, and supply chain disruptions challenging dairy farm and dairy processor businesses,”​ said John Umhoefer, Wisconsin Cheese Makers Association (WCMA) executive director. 

“It demonstrates the firm commitment of the Biden Administration, Secretary Vilsack, and Senator Baldwin to stabilize and strengthen the US dairy industry in ways that will enable us to meet the demands of a growing international marketplace.”

“The dollars directed to the Dairy Business Innovation Alliance are making a significant impact in our region, and this extraordinary investment in innovation will lead to new products and businesses, elevating the US dairy industry globally,”​ said Dr John Lucey, Center for Dairy Research (CDR) director. 

“As the new, state-of-the-art Center for Dairy Research facility opens and we implement more DBIA programs, I strongly believe that the US dairy industry, with its nutritious, high-quality products, will be well-positioned to compete.”

With total funding of $12.7m date, the Alliance of WCMA and CDR has delivered educational resources, direct consulting assistance, market research, product development and more than $6.8m in direct-to-business grants. 

“This added investment in DBII will support the creation of higher-wage, family-supporting jobs and help strengthen rural communities,”​ said Umhoefer. 

“We are grateful for the opportunity to expand the impact of the Dairy Business Innovation Alliance, and for Sen. Baldwin’s leadership to create and sustain our program.”

USDA disbursing funds through pandemic market volatility assistance and dairy donation programs

The USDA also announced it is disbursing funds to handlers to provide financial assistance to the dairy industry through the Pandemic Market Volatility Assistance Program (PMVAP), which is providing more than $300m in assistance to help the dairy industry recover from the pandemic.

After receiving the payments, handlers have 30 days to make payments to their eligible dairy farmer suppliers. Handlers began payments to farmers in January.  More than 60% of the agreements were processed and paid in January and February.  The remainder will be paid in March.

“I am pleased to announce that the majority of the Pandemic Market Volatility Assistance Program funds are flowing to farmers and that remaining payments will be made soon,”​ said USDA under secretary for marketing and regulatory programs Jenny Lester Moffitt.

“Dairy farmers worked throughout the pandemic to keep food on America’s tables, and this program is an important piece of USDA’s comprehensive targeted recovery assistance for dairy producers.”

Under the PMVAP, payments will reimburse qualified dairy farmers on an annual production of up to 5m pounds of milk, for 80% of revenue losses for fluid milk sales from July 2020 through December 2020. The payment rate will vary by region based on the actual losses on pooled milk related to price volatility.

In addition, the department is disbursing payments under the Dairy Donation Program (DDP). The DDP was authorized by the 2021 Consolidated Appropriations Act to provide $400m in funding to facilitate dairy product donations and reduce food waste.

Under the DDP, eligible dairy organizations can partner with nonprofit feeding organizations that distribute food to individuals and families in need. Those partnerships may apply for and receive reimbursements to cover some expenses related to eligible dairy product donations.

Entities previously enrolled with the Milk Donation Reimbursement Program are eligible to receive a supplemental payment on donations made since January 1, 2020, that equals the difference between the DDP and MDRP payment rates. Supplemental payments to qualifying handlers have already been made.

The program accepts applications on a rolling basis and processes claims on a quarterly basis. Quarterly reporting on program participation and funds disbursed will begin in April 2022.

These programs are part of $6bn of pandemic assistance USDA announced in 2021 to address gaps and disparities in previous rounds of assistance. Other pandemic assistance to dairy farmers includes $580m for Supplemental Dairy Margin Coverage for small and medium farms.

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