Katrina’s dairy losses could top $40 million to DFA families, Rita only adds to confusion

December 17, 2007

Dairy Farmers of America, Inc. (DFA) – a dairy farmer owned cooperative that markets milk for dairy farmers in the Hurricane Katrina affected areas of Louisiana, Mississippi and Alabama – estimates that immediate farm losses stemming from Hurricane Katrina could easily exceed $40 million. The cooperative has yet to put a figure on dairy farmer-related damages caused by Hurricane Rita.

“The dairy sector of agriculture is unique because its core product is fresh milk which is highly perishable. Add to that the fact that dairy cows must be milked at least twice daily. Cows don’t take a rest when such tragedies occur, so the costs related to lost milk production and cow health begin to mount quickly,” says Jim Hahn, chief operating officer of DFA’s Southeast Area based in Knoxville, Tenn.

In cooperation with the National Milk Producers Federation (NMPF), DFA submitted a comprehensive farm loss summary to the U.S. Department of Agriculture (USDA) delineating estimated damages to the dairy industry primarily in the states of Mississippi and Louisiana.

Katrina’s $40 million price tag, compiled by DFA, includes dumped milk, clean up, feed loss, fence and building damages, generators, fuel and the cost associated with hauling milk from outlying states to fill demand in the southeast following the hurricane. Hahn says these estimates reflect a “point in time calculation” and are “by no means” considered to be complete because animal health and long-term production loss issues will continue for some time into the future.

“Unfortunately for our dairy farm families, the costs associated with the crisis are ongoing and it is anticipated that long-term production losses associated with herd health issues will make it even harder for affected dairy farmers to stay viable,” says Randy Mooney, dairy farmer from Rogersville, Mo., and chairman of DFA’s Southeast Area Council.

Agriculture Secretary Mike Johannes, on September 20, 2005, released a preliminary assessment of total U.S. agricultural production losses due to Hurricane Katrina of nearly $900 million. USDA goes on to report that dairy producers discarded an estimated $3 million worth of milk due to lost electricity on farms and at dairy processing plants.

“The immediate need for financial assistance for the dairy farmer community hurt by Katrina is extremely critical. They need financial help soon so that rebuilding can get underway and further losses can be mitigated,” points out Hahn.

USDA disaster payments often take too long to get to farmers. Ironically, USDA was soliciting applications from mid-August through Sept. 9, 2005, for the 2004 Dairy Disaster Assistance Payment (DDAP) Program, which provided up to $10 million to assist dairy producers who experienced losses due to the 2004 hurricanes in Florida, Georgia and the east coast.

“The dairy farmers affected by Katrina in Louisiana and Mississippi can not hang on a whole year before they rebuild and get up and running,” says Mooney. “Hurricane Rita only adds to the confusion and to the stress levels of dairy farm families who are faced with rebuilding their businesses. It’s a stressful time. Cooperation is needed on all levels.” DFA is committed to being a leader in the support effort and has established DFACares, Inc., a fund to assist dairy farm families affected by Hurricane Katrina.