The new round of trade-related assistance totals $16 billion with $14.5 billion going to Market Facilitation Program payments. Rather than different rates for the various commodities, USDA Undersecretary Bill Northey said farmers will now be paid based on a single county rate. “The team has gone through and looked at the trade damage each county is feeling and we then divide that by the acreage planted within the county and will have a single payment, no matter which of the crops you plant.” The direct payments will be made for a variety of trade sensitive crops. In addition, dairy and hog producers will receive payments based on a system similar to what was done in the first round of assistance. This relief strategy is still being reviewed by the Office of Management and Business, but payments will be expedited. “The payments will come out in three different times of the year; we’re looking at a first payment coming out in July or August.” The second payment can be expected in November and the third will come in January. Agriculture Secretary Sonny Perdue said payments will likely be front-loaded, coming out shortly after the Farm Service Agency acreage reporting is wrapped up in mid-July. The first tranche of payments are the only ones guaranteed. The second and third tranches will be made if market and trade conditions are warranted.

Perdue highlights goals of new trade package
    Agriculture Secretary Sonny Perdue acknowledges farmers would rather have trade than aid. “Without the trade, farmers will need support from a profitability standpoint. We honestly and sincerely know and believe it is a food security issue, which leads to a national security issue,” Perdue said. “Our team at USDA reflected on what worked well last year and what we could have done better when we ran last year’s program. We redesigned this program to help farmers in the longer-term.” Perdue said one goal in this new round of trade assistance is to have farmers produce the way they would without the aid. “We don’t want to skew planting intentions.”

USDA leader discusses dairy issues in New York state
    Agriculture Secretary Sonny Perdue visited the Chobani factory in New York state and discussed trade, labor and immigration. Perdue voiced optimism about a trade deal with China, saying “Trump understands food security contributes to national security.” Local farm leaders also touted the benefits of whole milk in school lunch programs. “It’s all of our responsibility to educate and talk about the benefits,” Perdue said. “We’ve lost a whole generation of milk drinkers. We’ve got to build that back up.”

Dairy industry waiting for more details
    Dairy farmers will receive support through the Market Facilitation Program with the payment based on production history. National Milk Producers Federation spokesperson Alan Bjerga wants to see more information. “USDA gave a fair outline of where things may be going, saying a lot of the mechanisms will be similar to what was done with the trade mitigation payments last year. You can know the mechanism is the same, but there are a lot of details within that so I think the responsible thing for the dairy industry to do right now is to withhold judgement and let the process play out.”

Market development, commodity purchases included in USDA plan
    In addition to the updated Market Facilitation Program, USDA will invest $1.4 billion to purchase commodities for the school lunch program, food banks and similar feeding programs. Another $100 million will be handled by the Foreign Agricultural Service to develop new export markets.

Trade, Mother Nature both causing volatility
    Agriculture is on its sixth year of lower net farm income, due to a combination of many factors. American Farm Bureau Federation Executive Vice President Dale Moore said add in Mother Nature and the recent trade negotiations and he can’t think of a more volatile time in the last 30 years. “The announcement from President Trump to lift the steel and aluminum tariffs is a major step to moving the U.S. Mexico Canada Agreement, but lawmakers need to pass it.” Moore said there is hope very soon the administration can transmit documentation to the Hill. “We need to get some of these trade fires put out. Getting USMCA done will certainly give us a chance to focus on other trade battles.”

Restoring faith in the system
    A government shutdown following the signing of the 2018 Farm Bill delayed implementation of the new Dairy Margin Coverage Program. Five months later, Associated Milk Producers Incorporated Vice President of Public Affairs Sarah Schmidt said dairy farmers are starting to receive their letters from the USDA that spell out what they will receive in a Margin Protection Program refund. “That was another piece of the 2018 farm program; lawmakers recognized the MPP program did not work. Now, dairy farmers can decide if they want to take 50 percent of a refund in cash or use 75 percent of the refund and put it toward future DMC premiums. These aren’t big amounts of money.” Schmidt says dairy farmers will be making a decision about their DMC participation level based on this refund. “I think they’ll start seeing very quickly the DMC is the right thing to do.” Schmidt said it will take time for dairy farmers to regain faith in the USDA program. DMC sign-up begins mid-June and will be open for 90 days.

Milk output increases slightly
    In the 23 major dairy states, April milk production edged up a fraction of 1%. Milk production increased nearly 2% in South Dakota, helped by the addition of 4,000 cows to the state’s dairy herd in the past year. Minnesota milk production declined less than 1%. The number of dairy cows is down 5,000 head in Minnesota.

Alfalfa Genetics agreement announced
    A new licensing agreement for alfalfa genetics has been signed. Corteva Agriscience and S&W Seed have a new agreement that replaces a 2014 deal between Pioneer and S&W. Pioneer will receive an exclusive license to produce and distribute certain S&W-owned alfalfa varieties. Pioneer also receives seed inventory from S&W valued at about $25 million. S&W also retains ownership of the assets acquired in 2014, including alfalfa varieties, germplasm, research and development capabilities and production facilities. The full terms of the agreement were not announced, but S&W will receive $45 million in cash at closing and $25 million in payments concluding in February of 2021.

Trivia challenge
    June Dairy Month began in 1937. That answers our last trivia question. June Dairy Month actually had a different name when it began. What was it? We’ll have the answer in the next edition of Dairy Star.
    Don Wick is owner/broadcaster for the Red River Farm Network, based in Grand Forks, North Dakota. Wick has been recognized as the National Farm Broadcaster of the Year and served as president of the National Association of Farm Broadcasting. Don and his wife, Kolleen, have two adult sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.