A dairy economist says the Coronavirus Food Assistance
Program will help dairy producers, but like other commodities, it doesn’t cover
everything.
Marin Bozic with the University of Minnesota says, “This is
what producers need to know. The CFAP payments will be $6.20 per hundredweight
multiplied by the production in the first quarter of 2020 with dumped milk
included, but it appears forward-contracted milk excluded.”
Bozic tells Brownfield the CFAP calculations do not and
should not affect producers who use risk management programs like Dairy Margin
Coverage or LGM because it would send the wrong message to producers.
And, when it comes to the nearly 40% of milk not covered by
a risk management program, Bozic tells Brownfield he understands why. “Frankly,
some of them did not hedge in 2020 just because they really needed every penny
out of 2020 to make it through after so many years of low prices.”
Bozic says producers applying for the CFAP aid should
prepare their first-quarter production documents before meeting with the Farm
Service Agency to apply and to ask them how the payment caps impact their farm.
--Brownfield AgNews