USDA will provide $16 billion in direct payments to farmers and ranchers through the coronavirus economic stimulus package. From that total, dairy farmers will $2.9 billion. Minnesota Milk Producers Association Executive Director Lucas Sjostrom is pleased USDA is delivering a lump sum, up front payment. Each farm is limited to $125,000 per commodity and an overall limit of $250,000 for each individual or entity. “Which is obviously a huge amount of money and more than most people make in a year, but these business owners take millions and millions of dollars of risk. With the caps of $125,000 per commodity, I’m very concerned in that mid-sized range from 400 to 2,000 cows.” Sjostrom estimates 30 to 40 percent of the milk nationwide is covered by programs like Dairy Margin Coverage. Minnesota is far above that level with 60 to 70 percent of its milk covered by some form of insurance. The Minnesota Legislature offered incentives this past year for dairy farmers to enroll in DMC. “I hope Minnesota because of our risk management efforts, it maybe defeats the trends, but that doesn’t mean every single Minnesota dairy farm is going to be in good shape.” Class III milk prices were at $17.50 per hundredweight in early January with a typical bonus of $1 to $1.50. That price is now at $11. Sjostrom says mid-sized dairies and beginning farmers are the most vulnerable to the market losses.
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