<figure>
 <img src="https://media.eaglewebservices.com/public/2020/5/1588865787208.jpeg" alt="Photo by Amber Kipp on Unsplash" />
 <figcaption>Photo by Amber Kipp on Unsplash</figcaption>
 </figure>By GREG DOERING <a href="https://kansaslivingmagazine.com/articles/2020/04/29/covid-19-creates-uncertainty-at-kansas-dairies">Kansas Living Magazine</a>Dan Wiebe and his wife Kerry milk about 100 cows each and every day 
on the last remaining dairy farm in Butler County. The Wiebes have 
watched a “fairly good” milk market fall off a cliff over the past few 
weeks as Covid-19 upended the industry with the closure of restaurants 
and schools.Still, Dan says Keriel Dairy is fortunate because it has some 
protection through the U.S. Department of Agriculture’s Dairy Margin 
Coverage, a voluntary program that covers some costs if revenue falls 
below the cost to produce milk. The Wiebes signed up for the program in 
the fall, well before the pandemic hit.“They’re projecting for either April or May that the coverage will be
 paying out $5 per hundredweight (roughly 11.63 gallons of milk,” Dan 
says. “That’s how bad the price is.”When the year began, Dairy Farmers of America (DFA, the cooperative 
the Wiebes sell their milk through, paid about $18 for every 100 pounds 
of white liquid. The price declined between 20 and 40 percent depending 
on the class of milk produced by early April.“The problem is that insurance payment is going to lag behind probably 60 days,” Dan says. “There’s going to be a two-month window where we’re getting a third off our normal milk check.”<h2>MODEL INTERUPTED</h2>Freefalling milk prices are the result of sharply reduced demand from
 schools, restaurants and other institutional buyers. The supply chain 
to service those accounts can’t quickly shift to fill retail packages.One example Dan gave is cheese destined for restaurants is packaged 
in bulk bags or large blocks, both of which are now sitting on packed 
warehouses.“The price is right,” he says. “The plants would love to buy milk and
 make cheese, but they have no place to put the cheese because it’s not 
going out the door.”That disconnect has led DFA to dump some milk. While none of the 
Wiebes milk has been dumped, DFA is suggesting dairies consider a 10 
percent reduction in what they produce.Dan says there are a number of steps dairies can take to reduce their
 milk output, like removing lower-producing cows from the milking 
stream, feeding more to calves than normal, and “drying” cows, or 
increasing the number of days a cow doesn’t produce milk.<figure>
 <img src="https://media.eaglewebservices.com/public/2020/5/1588865861514.jpeg" alt="Courtesy photo" />
 <figcaption>Courtesy photo</figcaption>
 </figure><h2>CARES ACT</h2>The Coronavirus Aid, Relief and Economic Security Act will provide 
help to farmers and ranchers, including those in the dairy industry. The
 details of the package aren’t fully known, but there will be money for 
direct payments and additional funding for Dairy Margin Coverage.The U.S. Department of Agriculture also will partner with regional 
distributors to buy $3 billion in fresh produce, dairy and meat. The 
food products will be packaged in boxes and shipped to food banks, 
community- and faith-based organizations, as well as other nonprofits. 
The goal is to begin shipping boxes as soon as May 15.The program aims to support those who grow food and those who need it most while minimizing the amount of waste.<h2>LIFE UPENDED</h2>At McCarty Family Farms, supply and demand are less of a factor 
because of the dairy’s unique business model. Ken McCarty and his three 
brothers operate five dairies, including three in Kansas. They sell 
their milk on a cost-plus basis to Danone, which turns it into Dannon 
yogurt.“Basically, our books and our business are fully transparent to 
them,” McCarty says. “We have a guaranteed profit margin, but we work 
collaboratively on things that maybe are important to not only us as a 
company and Danone as a company but society in general.”Covid-19 hasn’t affected the bottom line at McCarty Family Farms, but it has changed how they and their 200 employees operate.<figure>
 <img src="https://media.eaglewebservices.com/public/2020/5/1588865893003.jpeg" alt="Courtesy photo" />
 <figcaption>Courtesy photo</figcaption>
 </figure>The McCarty dairies have implemented social distancing policies, restricted access to nonessential vendors, shifted deliveries from essential vendors, limited the number of workers allowed in breakrooms and reevaluated their entire supply chain.“We have visibility to the direct impact to the team members we see every day,” McCarty says. “We have the good fortune of being able to go to work every day. A lot of people don’t have that.”McCarty says his teams have had a minimal impact from school 
closures, and there are still plenty of conversations about helping 
workers with spouses who may have lost a job.<h2>BROADER FALLOUT</h2>McCarty says there’s opportunities for the dairy industry in the form
 of lower input costs for fuel and feed, but he worries that may not be 
enough for some farmers and ranchers.“The situation in general for the dairy industry and the ag market as a whole is dire,” he says. “We at McCarty Family Farms are very concerned about the long-term implications this will have on rural America.”McCarty says rural America runs on razor-thin margins in the best of times. He’s worried about how the downturn will affect schools, hospitals and small businesses in the communities where the family milks cows. While McCarty has a guaranteed profit margin, he recognizes many, especially in the dairy industry, are not as fortunate.<figure>
 <img src="https://media.eaglewebservices.com/public/2020/5/1588865954519.jpeg" alt="Courtesy photo" />
 <figcaption>Courtesy photo</figcaption>
 </figure>“We count our blessings, but we’re still dealing with a tremendous amount of uncertainty even in spite of all the good things we have,” he says. “The stress load is high, and we’re not dealing with a lot of the stress that other people are.”Kansas Living Magazine is a publication of Kansas Farm Bureau.

Covid-19 creates uncertainty at Kansas dairies