On May 4, 2020, the USDA announced a $470 million budget for purchasing surpluses across 16 food categories. Dairy’s allotment of $120 million exceeds the amount spent on any other category by over two-fold and accounts for more than a quarter of the total sum. Other allocations range from $5 million (for asparagus and pears) to $50 million (for potatoes and turkey products).
Dairy Funding
There are very few businesses that have not been dramatically affected by the COVID-19 pandemic. Among the restaurant, travel, and retail sectors, the dairy industry has also suffered massive losses. Farmers are forced to dump thousands of gallons of raw milk due to an unprecedented steep decline in sales. Unlike these other industries, the dairy market holds the unique position of being in constant decline, hanging on through the decades only thanks to government aid. In April, President Trump announced a $2.9 billion bailout for dairy farmers, followed by a viral video of Mr. Yoshio Shitamura, an official of Japan’s Ministry of Agriculture, dressed in a cow costume urging residents to drink more milk. This week an additional $120 million was yet another instance of the US government bailing out the dairy industry. But with dragging sales and a century-long toll on the economy, dairy doesn’t need another government intervention, it needs reinvention.
Origin of the Dairy Surplus
In the US, the dairy industry has faced an uphill battle since the 1920s, forever plagued by a surplus in product. The government has attempted to keep it afloat for nearly as long, developing campaigns including the National School Lunch Program and the National Dairy Checkoff to artificially create a demand to match production. While the milk dumping of today may seem extreme, some may argue that spending upwards of $100 million to transport and store government cheese in the early 1980s was even more outrageous.
Looking at Other Options
The dairy industry is not a smart investment of government dollars; the wiser investment would be spending the money on transforming failing dairies into businesses that will thrive.
Some former dairy farmers have already responded to declining sales by reinventing their businesses. As over 3,200 US dairy farms shuttered around them in 2019, a few early adopters transformed their dairy operations into more sustainable forms of agriculture. Some, such as Elmhurst dairy in New York, successfully shifted to producing plant-based milks made from nuts and oats; others, like Giacomazzi Dairy in California, have reverted to planting almonds and other high-demand crops. Dairy farmers can save their livelihood by switching to plant-based crops, but it takes money to make the transition. The government could do far more to help its dairy farmers by providing funding for those in transition, rather than attempting unsuccessful bailouts year after year.
The current pandemic is not responsible for decimating the dairy industry—it has only heightened dairy’s ongoing distress. Now is a time to reevaluate priorities and invest in building sustainable industries. By moving dollars away from dairy and toward plant-based farming operations, governments can help build profitable businesses, create stable jobs, and promote the health of their constituents.
