As farm prices plummet and more Wis farms die, Trump Admin gives even more subsidies

After a horrible last 2 years, new information is showing that the multi-year crisis on Wisconsin dairy farms is as bad as ever. Wisconsin already has led the nation in farm bankruptcies in each of the last two years, and the pace of farms going broke is picking up at an alarming pace in 2020.

Wisconsin farm bankruptcies are on the rise as the effect of coronavirus on the economy pushes already weakened businesses over the edge.

Since Jan. 1, court records show, 36 farmers have filed for Chapter 12, a section of the U.S. bankruptcy code that provides a glimpse into the much bigger problem of farm closures. By comparison, there were 57 Chapter 12 filings in Wisconsin in all of 2019.

In the last few years, thousands of dairy farmers have lost money as they've milked cows in an oversupplied market that's depressed prices.

Lately, the industry has been devastated by coronavirus shutdowns. About one-third of the state’s dairy products, mostly cheese, is sold in the food-service trade that's seen sales nosedive from the shutdown of restaurants, schools, sporting events, festivals and other markets for dairy products.

With business markets drying up, milk prices have collapsed well below the bottoms of $15-$16 per hundredweight that were hit in 2016 and 2018. As of today, May milk futures are barely over $11 per hundredweight.

While other industries have been bailed out, the Trump Administration hadn't said much about whether they would give more aid to agriculture. Until today, when we found out that they are planning to have another round of farm subsidies.

The U.S. Department of Agriculture will spend up to $15.5 billion in the initial phase of its plan to bolster the nation's food supply against the effects of the coronavirus pandemic, the news agency Reuters has reported, citing three sources familiar with the matter.

The initial plan will include direct payments to farmers and ranchers, along with other support measures, using a portion of the $23.5 billion approved by Congress to support agriculture in a coronavirus stimulus bill last month, according to the sources.

The USDA could make the announcement as early as this week, and is expected to detail later phases of the support program once more money from the stimulus bill becomes available, potentially in July, they said.

But what Farm Subsidy Part 3 doesn't look like it'll do is raise the plummeting prices that producers are getting for their products.

And the response from Wisconsin-based ag groups showed that straight cash wasn't the answer they are looking for.

Wisconsin Cheese Makers Association, Edge Dairy Farmer Cooperative, Dairy Business Association, Cooperative Network, Wisconsin Farm Bureau Federation, Professional Dairy Producers of Wisconsin and Wisconsin Farmers Union say the current circumstances, far beyond their control, have resulted in low farm milk prices devastating to the rural economy.

“With 80 percent of Americans under order to shelter in their homes, hundreds of thousands of restaurants, schools, and other food service outlets have closed or significantly reduced offerings, which means cheese and butter manufacturers have lost their largest market. While retail sales have increased in past weeks, they are now leveling, and orders are slowing. Dairy manufacturers and processors also have seen their export markets decimated,” the Wisconsin farm groups said in a letter to U.S. Agriculture Secretary Sonny Perdue.

The Edge Dairy Cooperative near Green Bay went further, releasing their outline of what proper federal assistance might look like.

In a letter sent on Friday to Secretary of Agriculture Sonny Perdue, Edge laid out three areas the cooperative sees as critical as the USDA considers how to apply relief from money allocated under the CARES Act economic stimulus package.

•Direct financial relief to dairy farmers, including for losses by farmers who have had to dispose of milk due to the collapse of a massive market in food service.
•Major government purchases of dairy foods that can fill a growing need among food assistance programs as millions of people lose jobs.
•Flexibility in labeling, packaging and nutritional guidelines for dairy products redistributed to food assistance programs so people can receive the food without delays.

In seeking financial relief for farmers, Edge is pushing for a two-part response. One is the Dairy CORE Program proposed by the Minnesota Milk Producers Association. That program would provide immediate financial relief to dairy farmers for April, May and June through a $3 per hundredweight payment for each month relative to a farm’s milk production in March. The program would make one $9per hundredweight lump sum payment upfront.

The second part is disaster-type payments for milk losses incurred during the month of April, based on March production.

Edge Cooperative is asking for more revenue and more places for their product to go, so we don't see more of this.

But I don't see any evidence of TrumpWorld wanting to raise the prices that those producers get. And if revenues don't go up, these subsidies will continue to do little to slow the farm crisis that has been especially rough here in America's Dairyland.