Relief may soon be on the way for Minnesota dairy farmers feeling the sting of the slumping farm economy.
On Friday in Litchfield, Sen. Tina Smith and Rep. Collin Peterson met with local dairy farmers, bankers and state and federal agriculture leaders to discuss solutions for the declining ag industry.
Dairy farms have struggled lately due to years of decreasing commodity prices and trade policy issues.
“It’s a very dire situation,” said Keith Olander, director of AgCentric, a state program that connects farmers to education opportunities. “We’ve had the second-worst year in a 60-year period.”
Friday’s meeting was part of an effort from Minnesota legislators to stop the hemorrhaging on dairy farms and make farmers aware of assistance available through the federal Farm Bill passed in 2018. Unfortunately, that assistance may not be available until summer.
“The department cannot get the new margin coverage in place before June, so (farmers) won’t be able to sign up until then,” Peterson said. “What I’m worried about is that people are going to quit before they can figure out what they can get.”
The Dairy Margin Coverage Program, which replaced the Dairy Margin Protection Program, is a voluntary program that makes payments to dairy farmers when the income-over-feed-cost margin falls below a farmer’s selected coverage level. The coverage levels offered by the program range from $4 per hundredweight to $9.50 per hundredweight.
The DMC will make payments monthly instead of bi-monthly if the margin falls below a farmer’s coverage level. The coverage will be retroactive from the first of the year, meaning that those who sign up in June will receive payments for the months of January through June when the benefits roll out, Peterson said.
“We are trying to get that information out — that’s why I wanted the bankers to be here, to get them to better understand this program that we’ve got in place and to get their help to not put people out of business,” Peterson said. “Help is coming.”
Although the program will roll out within the next three months, Peterson said the difficulty is convincing farmers to change their mentality toward government assistance programs.
“In the past, the way we’ve dealt with dairy farmers, when it’s bad, we give them money,” Peterson said. “So they are just not in this idea that they are going to get in some government program that is going to help them maintain revenue.”
Peterson said what he’s trying to do with this program is save the smaller dairy farms.
“The big guys are going to survive,” he said. “We go through these periods, and it’s tough, but it doesn’t put them out of business.”
Smith said she came to Litchfield knowing the dire situation in the dairy industry.
“Certainly, I didn’t hear anything to change my mind on that,” Smith said. “The idea of what we did in the Farm Bill with this new Dairy Margin Coverage Program is clearly going to help. I’m glad both the bankers and the dairy farmers could see that, and that will be useful. That’s why Congressman Peterson and I were pushing so hard to get that program implemented.”
This is a new kind of insurance, Smith said, similar the crop insurance.
“Everybody who is thinking about their operating loans and rolling those loans over should be talking to their bankers about how this margin program will kick in,” she said.
Long term, there are serious problems when farmers are making less and less revenue, Smith said.
“We know how important it is to keep agriculture local, and I want family farms in Minnesota to have a future and not just be a part of our past,” Smith said. “And that’s really the topic of conversation here.”
The trade and tariff issues have made the situation worse for farmers, Smith added.
“You have a perfect storm of low prices, trade challenges and then layer on top of that this terrible weather, which has put even more stresses (on farmers),” Smith said. “We all heard today the toll that this is taking on farmers’ mental and physical health, and that’s why I’ve been working really hard on the health committee on rural health issues (and) why I wanted to get a rural health liaison into the Department of Agriculture. We got that done in the Farm Bill.”
As far as the June benefit roll-out date, there are no promises, but Smith said she’s going to make sure the Farm Service Administration will have clear information about how the Dairy Margin Coverage Program will work.
“When people are trying to make decisions potentially about the future of their business, they need good information about how that program is going to work,” Smith said. “Every single banker nodded their head when we were talking to them, asking whether they were talking to their customers about this program and that they thought it was going to be helpful. They all nodded their heads ‘Yes.’”
