Edge Dairy Farmer Cooperative along with its sister organization, Dairy Business Association stood up against a proposal on April 29, 2020 that could have unintentionally done more harm than good for the dairy community.
The request, submitted to the U.S. Department of Agriculture by some in the industry, sought to temporarily, but significantly, modify the Federal Milk Marketing Orders system to artificially inflate the Class 1 fluid milk price. While this proposal could be helpful on its face, we had strong concerns over the secondary impacts to farms in the Midwest.
We acted swiftly in stating our opposition along with several other dairy groups, and, fortunately, the USDA quickly turned down the request. Read the agency’s open letter. We laid out our key concerns in a letter to USDA:
The change would leave behind dairy farmers in the Midwest like our members, whose federal order has a low Class 1 utilization rate because most of the milk goes into cheese and other non-beverage dairy products.
The proposal could create more problems, such as decreased customer demand and disruption of risk management programs, like Dairy Margin Coverage, that farmers are relying on to help endure the crisis.
Edge and DBA acknowledge that the request for the change was well-intentioned, but we do not think that a government-inflated price would be the best path forward during the crisis. We are focused instead on direct assistance that helps all dairy farms. This is why we advocated for the USDA’s Coronavirus Food Assistance Program (CFAP), which will provide direct payments to farmers and government purchases of dairy products for food banks. We also have urged USDA to remove caps on those direct payments so the assistance would better reflect the financial losses on all-size farms.
A simple, direct approach to helping farmers as proposed in CFAP is better suited to address the crisis at hand and do so uniformly.
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