Dairy Funding and Incentives

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Dairy Funding and Incentives

Wisconsin, Idaho, and Michigan are three states that have received significant funding for their dairy industry. Funding for initiatives in each state comes from the state budget, universities, and industry partners such as dairy farmer's associations. USDA also provides subsidies to various states for their dairy programs.

WISCONSIN

  • From 1995 to this year, Wisconsin received a total subsidy of $1.2 billion from USDA for its dairy programs, around $2.76 million of which is for market facilitation program payments for January to April 2019.
  • The programs in Wisconsin's dairy subsidy from 1995 to 2019 include the following, from highest to lowest in terms of the amount of subsidy: milk income loss contract payment ($737.31 million), dairy market loss assistance ($206.22 million), milk income loss transitional payment ($122.17 million), dairy margin protection program ($63 million), dairy economic loss assistance program ($59.20 million), dairy market facilitation program ($28.09 million), milk marketing fees ($26.58 million), and dairy disaster assistance ($1.43 million).
  • On April 17 this year, a $1.5 million funding from USDA was granted to the Dairy Business Innovation (DBI) Initiatives for Wisconsin dairy farmers, dairy processors, and cheesemakers. The initiatives are aimed towards fostering innovation, updating manufacturing practices, and reaching new markets to overcome current challenges such as oversupply of milk and low milk prices.
  • This September, the Center for Dairy Research and Wisconsin Cheese Makers Association was awarded an initial funding of more than $450,000 by the Dairy Business Innovation Initiative. The goals of the project include low-cost and/or free workshops geared towards product development and marketing.
  • In Wisconsin's FY 2019-2021 biennium final state budget passed by the Wisconsin Legislature and signed by Governor Tony Evers, a total amount of $8.8 million is allocated to the UW Dairy Innovation Hub as funding for dairy research to help dairy farmers grow their businesses.
  • The UW Dairy Innovation Hub's spending proposal focuses on the following areas: stewarding land and water resources, enriching human health and nutrition, ensuring animal health and welfare, and growing farm businesses and communities.

IDAHO

  • Idaho received a total of $130 million subsidies from USDA from 1995 to 2019, about $3.10 million of which has been received specifically for market facilitation program payments made between January to April 2019.
  • The programs included in Wisconsin's dairy subsidy from 1995 to 2019 are as follows, from highest to lowest in terms of the amount of subsidy: milk income loss contract payment ($78.04 million), dairy market loss assistance ($19.36 million), dairy market facilitation program ($10.64 million), milk income loss transitional payment ($8.31 million), dairy economic loss assistance program ($6.93 million), dairy margin protection program ($4.16 million), and milk marketing fees ($2.14 million).
  • This year, the University of Idaho was allowed by the Idaho State Board of Education to purchase land for its $45-million project called CAFE or the Idaho Center for Agriculture, Food, and the Environment. CAFE will be the nation's largest dairy research center, and it is a joint project of the University of Idaho and the Idaho Dairymen's Association (IDA). For the purchase of the land, the University of Idaho will pay $2.5 million and IDA $2 million. The two organizations have been working together for 15 years and have seen growth in Idaho's dairy industry since then.
  • Funding for CAFE will come from the state, the university, and other industry partners or outside sources. In 2018, Idaho's legislature appropriated $10 million for the CAFE project. The Idaho Farm Bureau announced in February this year that it will contribute $100,000 and another $20,000 a year for five years starting August.
  • Although there was no amount mentioned specifically for Idaho's dairy industry, Governor Brad Little says he will be prioritizing agriculture in the state budget. The proposed budget included $8 million to replace the Idaho State Department of Agriculture’s 54-year-old Animal, Dairy, and Plant Pathology Lab in Boise to support growth in dairy and other agriculture sectors.

MICHIGAN

  • From 1995 to 2019, Michigan received a total of $268 million from the USDA dairy program subsidies, $1.23 million of which is for market facilitation program payments made between January to April 2019.
  • The programs covered by the dairy program subsidies include the following, from highest to lowest in terms of the amount of subsidy: milk income loss contract payment ($160.07 million), dairy market loss assistance ($41.63 million), milk income loss transitional payment ($23.68 million), dairy margin protection program ($13.72 million), dairy economic loss assistance program ($13.48 million), dairy market facilitation program ($8.08 million), milk marketing fees ($6.47 million), and dairy disaster assistance ($604,673).
  • In May 2019, the Foundation for Food and Agriculture Research (FFAR) and Council on Dairy Cattle Breeding (CDCB) each gave $1 million to the Michigan State University to fund its research on improved dairy cow feed efficiency. Enhanced feed efficiency ultimately leads to a reduction in feed costs, thereby increasing profit and competitiveness of the US dairy industry, according to FFAR's executive director, Sally Rockey.
  • In January 2019, the Michigan Department of Agriculture and Rural Development (MDARD) released its budget briefing. Food and dairy received the largest appropriation in MDARD's 2018-2019 budget at $22 million. Of the said budget, $16.6 million goes to food safety and quality assurance.
  • The milk safety and quality assurance received $5.4 million. The milk safety quality assurance program includes licensing and inspection of dairy farms, processing plants, milk trucks, and milk haulers. This ensures the state's compliance with the Pasteurized Milk Ordinance (PMO), which is necessary for the sale of Michigan milk products out of state.
Sources
Sources

Quotes
  • "Dairy Program Subsidies in Wisconsin totaled $1.2 billion from 1995-2019‡."
Quotes
  • "U.S. Senator Tammy Baldwin announced Wednesday that $1.5 million in U.S. Department of Agriculture (USDA) grant funding for the Dairy Business Innovation (DBI) Initiatives to support Wisconsin dairy farmers and cheesemakers working to grow their business and reach new product markets."
Quotes
  • "With initial funding of more than $450,000, this project will offer low- or no-cost workshops designed to grow the dairy industry and allocate grants directly to dairy businesses for product development and marketing."
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  • "During the state budget deliberations, the Joint Finance Committee added a total of $8.8 million over the biennium for the UW Dairy Innovation Hub — $1 million in the first year and $7.8 million in the second year. "
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  • "Dairy Program Subsidies in Idaho totaled $130 million from 1995-2019‡."