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Update on USDA's Class I Pandemic Assistance Program

Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

Three weeks ago, I wrote about Agriculture Secretary Vilsack’s announcement of a USDA compensation program designed to provide money to dairy producers who did not benefit from the huge rise in market cheese prices caused by USDA’s Farmers to Families Food Box Program, which required each food box to include cheese, but not butter.

The details of this new program have now been released. In the article I wrote on August 20, I stated the following: “But then USDA says they will only cover up to 5 million pounds annual production per producer and since this program is for 6 months only, the effective cap is 2.5 million pounds.”

I was not alone in interpreting the USDA announcement in that way. However, in a presentation USDA is giving to the handlers who will implement the program, its instructions make clear that the cap is 5 million pounds per entity for the six months, essentially doubling the maximum payout from what I thought it would be. For California producers who qualify and reach the cap, the maximum payment will be around $30,000 per entity instead of the $15,000 I estimated three weeks ago.

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