US begins assistance programme for dairy
The Coronavirus Food Assistance Program was announced in the US last week. It is an important first step that begins to bring much-needed relief to the US dairy industry, according to Michael Dykes, president and CEO of the US International Dairy Foods Association.
With US$16 billion (€14.5bn) in payments to producers and $3 billion (€2.7bn) for food purchases, including at least $100 million per month in US government purchases of a wide array of dairy products, this is a robust good-faith effort to ensure the dairy supply chain remains intact. IDFA requested that the US Department of Agriculture (USDA) and the White House act with urgency to deliver an aggressive mix of direct financial support for producers as well as food purchases to offset growing food insecurity.
The administration delivered a creative approach on the product purchase side of this announcement. IDFA is pleased to see the USDA go beyond traditional programming to streamline the process and forge an important partnership with the private and non-profit sectors to incorporate underutilised foodservice infrastructure, such as transportation and refrigerated storage, to quickly and efficiently get food to Americans in need, Dykes noted. For dairy processors who have lost their foodservice business, IDFA is grateful that these USDA purchases will go to those most in need of nutritious food and spur demand for additional dairy products, he added.
The Covid-19 pandemic has deeply damaged the US’s dairy industry and brought financial hardship to producers and processors alike. As the crisis wears on, the dairy industry expects to lose $5-$10 billion in sales for the remainder of the year. Foodservice closures, a weakened export outlook, and challenges within the supply chain have created conditions where the milk supply exceeds demand by at least 10%, a gap that could widen as supply increases to its seasonal peak and “shelter in place” conditions endure. IDFA will continue to urge Congress, the White House and USDA to use as many tools as possible, as quickly as possible, to bring relief to the dairy industry without creating any long-term market repercussions, Dykes stated.
In the months ahead, IDFA will continue to work with policymakers to design policies and programmes, such as lending and working capital programmes, that preserve the dairy supply chain and ensure dairy remains an important part of feeding Americans in need, he concluded.