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Dairy Facts 2016

Stimulus Bills May Bolster Dairy Demand through Nutrition Programs

Feb 02, 2009

Following the U.S. House of Representatives' passage last week of an economic stimulus bill, the U.S. Senate is expected to pass its version of the bill sometime this week. Designed to jump start the economy with a combination of tax cuts and massive investments, the bills may add an additional $815 million for retail dairy purchases to the nation's food stamp program.

"With excess milk supply pushing down prices and demand for dairy products softening in some areas, it's notable that the stimulus bill could indirectly support the dairy sector with additional funding for programs that support food purchases," said Ruth Saunders, IDFA senior director of policy and legislative affairs.

One of the largest spending items in both bills is a 13.6 percent increase in benefits under the Supplemental Nutrition Assistance Program (SNAP), which is commonly referred to as "food stamps." The U.S. Department of Agriculture reports that over 29 million people use the SNAP program at an estimated cost of over $50 billion annually. USDA also reports that 12 percent of food stamps are used to purchase dairy products, which equates to $6 billion annually. If the SNAP increases are passed in the stimulus bill, an additional $815 million would go to increased retail dairy purchases, according to these reported purchasing trends.

The Senate bill also includes a $198 million grant program for school foodservice equipment. In the past, this program has allowed some schools to add or upgrade their beverage coolers, allowing improved access and increased demand for milk in schools. IDFA has actively supported this program and commends Senators Patrick Leahy (D-VT) and Senator Tom Harkin (D-IA), chairman of the Senate Agriculture Committee, for working to include it in the Senate stimulus bill.

In the House bill, a complementary program would fund after-school feeding programs for low-income, at-risk children for all 50 states, up from just seven states. Milk is a component of these after-school programs.

"Appropriate funding for these programs is important to improve the supplied nutrition and learning environment in our nation's schools. It also will make it possible for more kids to get the recommended three servings a day of milk and dairy products," said Saunders.

Both the Senate and House bills include $150 million for food banks, under USDA's Temporary Emergency Food Assistance Program (TEFAP). In the past, USDA has purchased reduced-fat cheese, ultra-high temperature (UHT) milk and other dairy products for donation through food banks.

The bills also include numerous programs for farms, covering areas such as farm operating loans, energy-efficiency promotion and watershed rehabilitation. However, efforts to include a cow herd buy-out or loan guarantee and increases to the MILC program were unsuccessful in the House bill.

According to Congressional leadership, both stimulus bills are expected to be passed and then signed into law by mid-February.


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