According to University of Minnesota Assistant Professor in Applied Economics Marin Bozic, the USDA provided generous Coronavirus Food Assistance Program direct payments to dairy farmers. The payment rate is $6.20 per hundredweight applied to first quarter milk production. “You take the pounds produced in the first quarter of 2020, multiply it by the payment rate and that’s as much as you could potentially get from the program,” says Bozic. “Then, are several caveats. If you’re a relatively large producer and this product of pounds produced gets you more than $250,000, you’ll likely be subject to payment caps.” The direct payment cap in the program is $250,000 per individual or per legal entity. Eighty percent of the payment will be received shortly after applying at the Farm Service Agency, but Bozic explains it’s unknown how many funds will be dispersed in this first round or if the remaining 20 percent will be paid out. There is also some confusion about to what kind of risk management activities will make dairy farmers inactive for the payments. “It would be quite alarming if people who did the right thing wouldn’t get as much as those who essentially gambled on 2020 prices.” Bozic says these direct payments will likely be a bigger help than the Dairy Margin Coverage payments, but this is a one-time payment program. “These are one-time payments that one should never expect to be reoccurring.” Read more about the CFAP.
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