Dairy aid program once again focuses on small herds

USDA delivered details about its $290 million Dairy Economic Loss Assistance Payment program package last week. Those details clearly show that it is yet another federal program which does not focus on fairness or equality, or on helping the entire industry. Instead it focuses on helping just certain parts of it.

In a nutshell, dairy producers who have bigger herds are once again getting the short end of the stick.

Details about the $290 million in direct payments that will be made to producers next year start to look like a lump of coal for anyone who milks more than about 294 cows. That’s approximately where the annual production limit of six million pounds during 2009 kicks in that will be used to calculate payments. Dairies producing under that amount will receive a single lump sum from USDA of about 32 cents per hundredweight. But for any dairy that made over six million pounds – and no matter how much more – the payment limit is $19,200.

Thus, the program is a stinging slap in the face to larger herd producers everywhere, and to the West in general. That’s because the payment cap has the effect of saying, “Your financial loss during 2009 was not as painful as small herds’ losses. Your suffering didn’t matter as much. You don’t need our help as much.”

In New Mexico, for instance, where the average dairy produces over 49 million pounds per year, the Loss Assistance Payment will be about 4 cents per hundredweight. In Arizona it will be about 5.3¢. In California, Colorado, Idaho and Nevada it will be about 9¢. In Florida it will be about 13¢.