VERMONT — The state of Vermont has announced a new grant program aimed at helping dairy farmers and businesses that produce dairy weather the economic fallout from COVID-19.
Of the $35 million in federal funding the state has set aside for the Vermont COVID-19 Agriculture Assistance Program (VCAAP), $21.2 million will be available as direct payments to eligible dairy farmers and $3.8 million is allocated for eligible dairy processors, to cover losses and expenses incurred because of the pandemic, according to the Vermont Agency of Agriculture, Food and Markets (VAAFM).
“These dollars are needed because the virus has wiped out many important markets for dairy farmers, cheese makers and value-added businesses,” said Secretary of Agriculture Anson Tebbetts at a July 14 press conference. “When the country shut down, these small businesses that relied on restaurants, colleges, schools and institutions for a paycheck — they were lost.”
Since March 1, Vermont has lost 25 dairy farms, Tebbets said later in the press conference — a rate of about 5.5 per month.
“The rolling average before COVID was about 1.5 farms lost per month, so you can see that this has been a direct result of what happened when the markets went away for our dairy farmers.”
The state records the loss of dairy farms through the “regulatory process,” VAAFM Policy and Communications Director Scott Waterman told the Independent. Dairy farms are required to hold a permit to operate, so when those permits are not renewed, the state counts it as a lost dairy farm. The VAAFM does not seek or receive information about why permits were not renewed or whether a particular operation has gone out of business, merged with another dairy or opted for other agricultural pursuits, Waterman said.
Often a decline in the number of dairy farms can be attributed to consolidation, said John Roberts, a former dairy farmer and the executive director of the Champlain Valley Farmer Coalition, during a phone interview with the Independent.
Regarding the recent higher rate of losses, it could be that market declines and a drop in milk prices — in a year when those prices were finally expected to exceed the cost of production — were for some farmers “the straw that broke the camel’s back,” Roberts said. Recent events and market conditions might have been “one psychological trauma too much.”
For the most part, however, despite a decline in the number of farms, Vermont’s dairy production has remained relatively stable, Roberts pointed out.
“Those farms that remain are more efficient, which is part of why we’ve been seeing this transition (to fewer dairies),” he said.

PAYING THE BILLS
VCAAP grant money “is not going to stay on the farm very long,” Tebbetts said. “It’s going to go out to the businesses that rely on dairy farmers for their supports, so it’s going to the feed dealers to pay the grain bill. It’s going to pay the people that supply them. It’s going to pay the veterinarian.”
Roberts, who owned and operated Butterwick Farm in Cornwall for 36 years, pointed out that the drop in milk prices (which plummeted from $19.28 per hundredweight in December to $13.47 in May) came at a time of year when dairy farmers incur some of their biggest expenses, which would include fuel and fertilizer.
Some operations could also be struggling to make debt and mortgage payments, he said, “but after five years of low milk prices, dairy farmers have probably figured out a system for keeping debt as low as possible.” Besides, he added, the days of generous credit lines for farmers are long gone.

PAYCHECK PROTECTION
Tebbetts estimated that 636 cow dairies now remain in the state.
More than a third of those operations have received aid from the federal Paycheck Protection Program (PPP), which was established as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to help businesses, nonprofits and the self-employed continue paying their workers during shutdowns related to the pandemic. In some cases, PPP loans may be partially or fully forgiven.
In Vermont, 248 dairy farms received somewhere between $12 million and $19.2 million in PPP loans, according to data provided by the U.S. Small Business Administration (SBA). The SBA did not release the exact figures for larger loans — only ranges.
Collectively those dairy farms claimed to be employing at least 1,621 workers around the state.
The 23 largest PPP loans issued to Vermont dairies totaled at least $5.1 million, and may have been as much as $12.3 million.
In Addison County, 54 dairy farms employing at least 452 workers received between $4 million and $6.8 million. The largest eight of those operations received between $1.8 million and $4.7 million.
The median PPP loan approved for Vermont dairy farms was $18,515, according to the SBA data.

VCAAP
Gov. Phil Scott acknowledged at the July 14 press conference that VCAAP grant funding is not enough.
“Even if we had received all we had asked for, it wouldn’t have been enough to offset the impact of the virus,” he said.
But the VAAFM does expect to have adequate funding for all eligible dairy producers and processors to take advantage of the program.
Applications for VCAAP grants are now being accepted. The deadline is Oct. 1.
Dairy farmers and dairy processors who were operating as of March 1, 2020, and incurred losses related to the COVID-19 public health emergency, are eligible to apply. Examples of losses include milk-price declines, loss of income, product losses, the purchase of additional personal protective equipment and additional cleaning and sanitation supplies, workforce modifications to accommodate social distancing and worker housing adaptations to accommodate social distancing, Tebbetts said.
Losses that have been covered by other state or federal assistance programs are not eligible for VCAAP grants.

NON-DAIRY AID
In addition to dairy assistance, Coronavirus Relief Fund appropriations for agriculture and forestry will include:
•  $5 million for non-dairy farmers, meat and poultry processors, slaughterhouses, and farmers’ markets.
•  $500,000 for agricultural fairs.
•  $2.5 million for the Working Lands Enterprise Fund for agricultural, food and forest, and wood product industries.
•  $1 million for the COVID-19 Working Lands Program for agriculture, food, and market businesses.
•  $5 million for a Forest Economy Stabilization Grant Program, to be managed by Vermont Forests, Parks and Recreation.
Applications for those grants are being developed and finalized, Tebbetts said.
For more information about the Vermont COVID-19 Agriculture Assistance Program, including a list of frequently asked questions, head online to agriculture.vermont.gov/covid-19-information/vermont-covid-19-agriculture-assistance-program.
Reach Christopher Ross at [email protected].