USDA establishes Dairy Donation Program

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WASHINGTON — U.S. Department of Agriculture Deputy Secretary Jewel Bronaugh announced Aug. 25 the establishment of a $400 million Dairy Donation Program on a call with Senate Agriculture Committee Chair Debbie Stabenow. 

The program, established by USDA’s Agricultural Marketing Service in accordance with the Consolidated Appropriations Act of 2021, aims to facilitate timely dairy product donations while reducing food waste. 

Program

The establishment of the program is part of $6 billion of pandemic assistance USDA announced in March and follows the announcement of $350 million Pandemic Market Volatility Assistance Program for dairy farmers on August 19. 

It is the second part of an over $2 billion comprehensive package to help the dairy industry recover from the pandemic and improve or establish programs to make it more resilient to future challenges. 

Under the program, eligible dairy organizations will partner with non-profit feeding organizations that distribute food to individuals and families in need. Those partnerships may apply for and receive reimbursements to cover some expenses related to eligible dairy product donations. 

The program was inspired in part by the donations made by Michigan Milk Producers Association in conjunction with the Food Bank of Eastern Michigan in response to the Flint water crisis. 

Details

Dairy farmers, cooperatives or processors that purchase fresh milk or bulk dairy products to process into retail-packaged dairy products and meet other requirements are eligible to participate. Costs reimbursed through the program include the cost of milk used to make the donated eligible dairy product and some of the manufacturing and transportation costs. 

Reimbursement of these costs is designed to help offset some of the costs associated with processing and donating eligible dairy products. Program details are available at ams.usda.gov/ddp. 

Interested partnerships must apply by completing and submitting a Dairy Donation and Distribution Plan. Upon plan approval, partnerships will be able to submit claims and supporting documentation to obtain reimbursement for eligible dairy products donated since Jan. 1, 2020. 

Entities participating in the Milk Donation Reimbursement Program will be automatically enrolled in the Dairy Donation Program. The interim final rule formalizing the program will soon be published in the Federal Register and will provide eligible handlers and cooperatives procedures on how to participate in the program. 

The program becomes effective one day after it is published in the Federal Register. A preview of the interim final rule is posted on USDA Agricultural Marketing Service website. 

Future

Upcoming additional announcements will include $580 million for Supplemental Dairy Margin Coverage for small and medium farms. Outside the pandemic assistance funding, USDA will also make improvements to the Dairy Margin Coverage safety net program updating the feed cost formula to better reflect the actual cost dairy farmers pay for high-quality alfalfa. 

This change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021. Unlike the pandemic assistance, this change will also be part of the permanent safety net and USDA estimates it will average about $80 million per year or approximately $800 million over 10 years for dairy headed into the upcoming Farm Bill. 

Full details on these additional actions to support dairy farmers will be provided when regulations are published in the coming weeks. Dairy farmers should wait until these details are available to contact their local USDA Service Center for more information.

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