California
- California dairymen got the short end of the stick last week when
the federal government announced its Dairy Economic Loss Assistance Payment
(DELAP) program.
The program, part of the 2010 Agricultural
Appropriations Bill passed in the fall, authorized $290 million for loss
assistance payments to eligible dairy producers.
However, after assurances the money would be evenly distributed, the announcement
last week showed California dairies would be getting about 10 percent
of the money, even though they produce more than 20 percent of all the
milk in the United States.
“We got hosed,” said United Western Dairyman's CEO Michael Marsh. “This was not good.”
Based on the plan announced last week, the average California dairy will receive $19,200 – the cap put on the payout. That is about what every dairy will receive – be it a 300-head dairy or more than a 1,200-head dairy, the average size of dairies in Tulare and Kings counties.
“I appreciate the intention, but it just doesn't do enough for the damage that's been done already,” said Waukena dairyman Ben Curti.
Valley Congressman Jim Costa said the ag department shortchanged dairymen in the state.
“Today's announcement by USDA to create a new Dairy Economic Loss Assistance Payment (DELAP) program offers almost no viable assistance to our dairy producers. In fact, it's a slap in the face to every dairy producer in California,” said Costa last week.
He said the payments most dairy families
will receive won't even cover a month's feed bill, let alone help dairy
producers obtain a new line of credit at the bank.
Marsh said the ag secretary had assured California Sen. Barbara Boxer
the money would be equitably distributed. “I don't think the secretary
kept his commitment to Sen. Boxer,” said Marsh, adding that it was
those assurances that made Boxer vote for the bill.
Costa felt similarly betrayed.
“I received assurances that the assistance USDA provided would be distributed fair and equitably. I don't know a dairyman in my district who believes this is fair for California.
“It's unclear if USDA understands the complexities of California agriculture. I am thoroughly disappointed how USDA designed this program, and I will ensure Secretary Vilsack hears from me and from each and every dairy producer in the San Joaquin Valley.”
Most local dairymen were not big fans of the assistance plan. Many felt the money should be used to purchase dairy products and then give those products to food banks. That would have at least brought down inventories, they said.
Marsh agreed.
“Buying commodities would have
been the best use of the money,” he said.
He added that it would only require a dairy of 269 cows to produce the
amount of milk to qualify for the maximum payout. The average herd size
in Wisconsin is less than 100 cows. It is more than 1,000 in California.
California dairies wanted the payout based on either the number of cows or the total amount of milk produced, but Midwestern dairies were successful in having the payouts based on a formula that actually penalizes large dairies. For the large dairies, the $19,200 is barely one month's loss when prices were at their lowest.
“It's already been spent,” said Curti.
Had the payout been based on number of cows, dairies in Tulare County would have received between $25,000 and $35,000.
“It is the equivalent of about four loads of Nevada hay,” said Marsh of the $19,200 payout.
Ag Secretary Tom Vilsack praised the program.
“Through this program, eligible dairy producers will receive economic assistance that will help stabilize their operations during these tough economic times,” said Vilsack. “I have personally heard from hundreds of struggling dairy farmers from all across our country who have been hit hard by declining prices over the past year, and now, we'll be able to offer them help.”
Dairymen have been struggling for the past 12 months as dairy prices plummeted. Milk prices declined substantially through early-to-mid-2009, with the national price for milk averaging $16.80 per hundredweight (cwt.) in the fourth quarter of 2008 and averaging $12.23 per cwt. in the first quarter of 2009, a 27 percent decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.
However, prices are rebounding slowly, said Marsh. He said the price per hundredweight this month will be $14.55 compared to $9.58 in February. In early 2008, prices topped $20.
To be eligible for DELAP, the dairy producer and the dairy operation in which the producer has a share:
Must have produced milk in the United States and marketed milk commercially at any time from February through July 2009;
Must have milk production data for those months;
Must certify to all milk production produced and marketed by the dairy operation during that time.
Also, any dairy producer who has an annual average adjusted gross nonfarm income of more than $500,000 for calendar years 2006 through 2008 is not eligible for DELAP.
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of The Valley Voice Newspaper and may not be reprinted without explicit
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