FARMERS TO FAMILIES FOOD BOX PROGRAM TO END:

USDA Communications Director Matt Herrick told Reuters that after reviewing the Farmers to Families Food Box Program that was established last year in response to the COVID-19 pandemic, President Joe Biden's administration has decided not to continue it after May.

Under newly appointed Secretary Tom Vilsack, the USDA is "focused on different hunger initiatives, including expanding food stamp benefits and increasing food purchases through existing government food distribution programs," Herrick said. "We're not going to replace the program," he said.

Earlier this month, HighGround sources confirmed that the current Round Five of the program was extended through May. This timeline aligns with the USDA comments that confirm the program will cease after its current round. 23.8 million boxes have been delivered in this round to date that began on January 19.

DAIRY DONATION PROGRAM DETAILS RELEASED:

Yesterday afternoon, USDA published a press release titled, “USDA Provides Notice of Retroactive Reimbursements Under the Dairy Donation Program, Encourages Donation of Surplus Dairy Products.”

Back in late March, USDA alluded they were moving forward with this program that was a part of the late-December stimulus bill signed by President Trump. This notice provides a few more details but leaves out some critical items the industry needs to wrap their arms around before they can determine how to take advantage of this program. 

Key takeaways from the press release include:

•    The program will be retroactive for any donated items from Dec 27, 2020 onward.
•    Reimbursement rate:  “The statute requires a reimbursement rate for eligible dairy products at a value that encourages the donation of these products, facilitates orderly marketing, reduces volatility related to significant market disruptions, maintains traditional FMMO class price relationships, or stabilizes on-farm milk prices. The rate also must be sufficient to avoid food waste and not interfere with the commercial marketing of milk or dairy products. Until defined in the regulations, dairy organizations can plan on a rate of reimbursement equal to the minimum classified value of the milk when the donated product was processed.”
•    Eligibility is open to dairy farmer cooperatives and processors who “account to” a Federal milk marketing order.

HighGround's Take:

•    The conclusion of the Food Box program is not hugely surprising. Details and discussion about the program have been limited since the new administration was installed in January, with USDA seemingly shifting priorities to existing programs like food stamp benefits. While extremely volatile towards cheese markets in 2020, vendors took lessons learned during the initial rounds of the program and implemented them in recent rounds, reducing market volatility and impact into 2021. With foodservice demand increasing and general support persisting among nearly all commodities, the conclusion of the program will have a limited impact on the dairy prices as demand is shifted to other areas.
•    In the Dairy Donation Program, neither the reimbursement rate or the eligible dairy products have been announced or determined yet. These two components are critical to gauge the feasibility of this program. Until we understand that, it is hard to assess what impact this will have on US dairy markets, if any. Of note, the program does have a $400 million budget per the stimulus bill, though the USDA did not mention that in this announcement.