Tom Vilsack, CEO of the U.S. Dairy Export Council and former ag secretary, did not hold back when describing the impact the COVID-19 pandemic is having on dairy farmers.
“I think it’s fair to say the pandemic has been a gut punch for all farmers, but primarily dairy farmers,” Vilsack said. “We have seen Class III milk prices drop 36% at a time when dairy farmers were just starting to see a recovery.”
Vilsack spoke to members of the media during a teleconference with the National Dairy Checkoff on April 10. He explained what he and the USDEC are doing to boost milk exports during the coronavirus pandemic. Vilsack said he is troubled by reports that some dairy farmers in 18 states, including Wisconsin, are being asked by processors to dump milk because they have no place left to store dairy products.
Before the pandemic, 15% to 16% of U.S. milk production was sold through dairy exports, according to Vilsack.
“Our February numbers show dairy was exporting at a rate higher than in February 2019,” he said. “We expect economic uncertainty has made exporting dairy difficult. We won’t have the numbers for March until the first week of May to know what our exports are now. There will be a significant drop when we get those numbers, I’m sure, but we don’t know how low those numbers will go until we get the data.”
Vilsack said the USDEC “continues to work with the Chinese, not only on the implementation of Phase 1 of the U.S.-China trade deal, but as China tries to rebuild their hog industry, we hope dairy will be a part of that. We saw whey sales rise in February.”
China isn’t the only country the USDEC is working with. “Four of our top 10 markets are located in Southeast Asia,” Vilsack explained. “Despite the fact that there is a lockdown in Singapore, we are working extensively with markets in Southeast Asia, because they are in a curve to recover from this virus before we do.
“We are working with key markets to provide them with cheese specialists. We are trying to provide a presence at trade shows. In some cases, we are looking at providing a virtual presence.”
Vilsack said the USDEC is providing outreach to the Mexican government to make sure product is allowed to flow across the border to Mexico during the coronavirus pandemic. Mexico is the No. 1 importer of U.S. dairy exports.
“We are continuing to work with the Mexican government to encourage dairy consumption,” he said. “It is a very key market for us.”
Vilsack wants consumers and grocers to be aware that the dairy industry has plenty of dairy products to feed the nation and help feed the world.
“Cows don’t know there’s a virus, and they’re continuing to produce milk, and farmers are continuing to work 24 hours a day, seven days a week, to produce milk,” he said. “There is no need for retail to restrict consumers on purchasing milk and cheese, and there is no need to restrict export sales.”
Providing help to dairy industry
Vilsack said the government needs to help dairy farmers and processors through this disaster.
“It is critically important that we stimulate the economy and help the dairy industry and dairy farmers,” Vilsack said. He is calling for the government to:
- reopen the sign-up for the Dairy Margin Coverage program to help keep dairy farmers in business
- buy dairy products to give to food banks at a time when they are seeing a 40% increase in demand
- get school meals to students during the week and on weekends
- avoid the dumping of milk
“I recognize USDA has a lot of demands, but we hope they will provide help to farmers,” Vilsack said. “This is a very serious situation. After five years of very depressed milk prices, dairy farmers have suffered dramatically, and now we have a pandemic. [Ag] Secretary [Sonny] Perdue is probably not comfortable with reopening the Dairy Margin Coverage program, but that is necessary. My heart goes out to Secretary Perdue, but this is such a unique circumstance.”