Editor’s note: This is the second of two articles about the impact of the COVID-19 related closings on Florida dairy farmers’ incomes.
Southeast Milk, Inc. in Florida is one of many dairy cooperatives nationwide which have been financially devastated by COVID-19 and the resulted closings of schools and restaurants that have traditionally been large purchasers of milk.
“The situation is worse than anything we’ve experienced in our lifetimes,” said Joe Wright, SMI president, and owner of V&W Farms in Hardee County. “SMI stands to lose $72 million by the end of the summer due to a $4.50 per cwt (1 cwt = 11.67 gallons) decrease in the 2020 price outlook. If dairy farmers in Florida who do not belong to SMI are included, the income loss will exceed $100 million.”
Florida, which ranks 19th among the states in dairy production, is a fluid milk state. Most of the milk produced goes into drinkable milk. Florida does very little manufacturing of dairy products like cheese, butter, yogurt, or ice cream.
SMI has approximately 130 members across six states in the Southeast. Forty percent are Florida dairy farmers. They account for 85% of SMI’s milk production.
While retail stores can never make up for the volume of milk sales that would have been generated had food service establishments and schools remained open, at least one retail store is offering to help.
Publix recently launched a program to purchase fresh produce and milk and to donate these products directly to Feed America member food banks in its operating area.
Although public schools in Florida will not reopen until the fall at the earliest, schools are also purchasing limited quantities of milk for boxed breakfasts and lunches for all students who sign up for them. This program will probably continue through the summer.
“While we are delighted with these efforts, these are challenging times for an already fragile industry, and we need the help of the federal government, if our dairy farms are to survive,” Wright said.
With funding provided under the Coronavirus Food Assistance Program (CFAP), which is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the United States Department of Agriculture (USDA) has set aside $2.9 billion for direct aid to all U.S. dairy farmers.
SMI has reviewed the initial guidelines for distribution of the funds and submitted comments to USDA. “We believe that the guidelines treat Florida farmers unfairly, and we hope we can convince USDA to change them,” Ray Hodge, SMI government relations director, said.
The guidelines call for paying farmers 85% of the price losses that occurred Jan. 1 through April 15 and 30% of the expected price losses from April 15 through the next two quarters. SMI wants these guidelines changed, because Florida did not begin experiencing losses until the beginning of April.
During the first nine days of April, SMI dumped 314 tanker loads of milk for a loss to SMI’s members of $1,570,00,000.
To avoid further dumping and to bring balance back to the market, all SMI members then agreed to reduce their production for the foreseeable future by 10% of their baseline production in March. “But this balancing act came at a great cost to the farmers who should be reimbursed for these losses as well,” Hodge said.
SMI also opposes the payment limit of $125,000 per farm, because it fails to take into account the size of the dairy. Florida dairy farms are larger than the U.S. average; for most of these farms, their losses will greatly exceed $125,000.
According to Hodge, there is plenty of funding in the CFAP pot to remove the limits and still cover the losses experienced by both large and small farms. Dairy industry experts agree and go so far as to say that if the USDA’s initial guidelines are used, the department won’t come close to spending the $2.9 billion set aside for dairy losses.
USDA will be publishing final rules for administering the funds shortly. “We just hope that the department takes Florida dairy farmers’ reservations with the initial guidelines seriously and that the final rules treat us fairly,” Hodge said.
On another matter, dairy farmers continue to experience extreme volatility in the price they are paid each month for the raw milk they produce.
With the market being out of balance as a result of the closing of restaurants and schools and the retail market demand not being able to take up the slack, prices have plummeted still more in recent months and will continue to do so throughout the summer.
For that reason, several cooperatives, including SMI, sent a letter to USDA, asking for a hearing to consider implementing a temporary floor on the price for fluid milk that would continue throughout the summer.
USDA turned down the request stating that it had been contacted by other stakeholders who would like it to consider other solutions. The letter also stated that the request, which would go into effect immediately, does not permit USDA sufficient time to implement the required rule making followed by a period when all stakeholders could comment.
SMI is hopeful that Congress will appropriate another round of funds for dairy farms in late summer.
Dairy farms nationwide were closing at unprecedented rates before the COVID-19 pandemic. Wisconsin lost over 800 dairies in 2019. Florida is down to 75 dairies as compared to 140 dairies 10 years ago.
LORIDA — Richard James Buckner, 19, of Lorida is in the Highlands County Jail awaiting a $210,000 bond after being arrested for discharging a firearm from a vehicle and two counts of attempted homicide in the early hours of Wednesday morning.
According to the arrest report, deputies from the Highlands County Sheriff’s Office responded to Varsity Lane and Umber Court because of an aggravated burglary call. The deputies made contact with a male and female victims.
The male victim said he was riding his four-wheel ATV when the vehicle broke down a few miles from his home. The male victim called his girlfriend to tow his ATV back to his house. When the girlfriend got to Valentine Avenue, she began to tow the ATV south. The couple noticed lights behind them at the intersection of Valentine Avenue and Hicks Road. The male victim allegedly recognized a grey Chevrolet SUV and knew the driver and identified the passenger as Buckner, the report stated.
The male victim informed deputies that the tow strap and ATV separated. The pair got out to reattached the strap and ATV. As this was happening, the male victim said he saw Buckner lean outside the passenger window and fire nine shots toward them, the report shows. The vehicle allegedly reversed and left the scene.
Deputies found four 9mm shell casings at the scene. The driver of the SUV went to his home on Valentine Avenue and was detained, read his Miranda warning and gave a statement. He said he drove the SUV and Buckner pulled the gun from his pocket, leaned out the window and shot in the victims’ direction. The driver of the SUV let Buckner take the vehicle to Buckner’s home on Hicks Road. A search of the vehicle led to finding a 9MM gun under the driver’s seat and a spent casing on the front windshield.
The female victim said she could not identify the shooter because she was ducked down to avoid being shot. She also told deputies that she had text messages from Buckner starting just after midnight that were filled with expletives. At 3:18 a.m. the male victim replied with an expletive-filled text.
The report shows the male victim told the deputy that Buckner confronted him in his front yard three days prior to the shooting incident “wanting to fight.” Buckner allegedly went to his car and pulled out a handgun saying, ”I’d love to shoot you in the face.”
As the first week of Phase 1 of Florida’s reopening comes to a close the number of positive COVID-19 cases in Highlands County reached 93 as of Friday’s update. One additional death has been reported increasing the total to 8. The number of hospitalizations remains unaltered at 31 with 30 residents and 1 nonresident.
The first positive case reported in Highlands County was on March 21.
Statewide, a total of 39,199 cases have been confirmed with the death toll increasing by 69 for a total of 1,669.
The total number of tests administered in Highlands County is 1,610 with 1,516 negative tests results of which 39 are non-Florida residents. One result has come back inconclusive and six are waiting for results. The percent of positive cases is 5.8%.
Of the 93 positive cases in Highlands County, 92 are residents and 1 non-resident. The cases include 46 male and 46 females, ranging from ages 0 to 85, with a median age of 55.
FDOH is releasing details of ethnicity and race regarding the positive cases in each of the state’s 67 counties.
Highlands County’s cases by ethnicity are 30 Hispanic, 55 non-Hispanic and seven unknown/no data. The cases by race are 49 white, 23 black, 18 other and two unknown/no data.
The total number of positive cases in Florida is nearing the 40,000 mark. Florida has 39,199 confirmed cases that is a 371 increase since Thursday; 1,027 of those are non-Florida residents. The total number of deaths increased by 69, bringing the total to 1,669.
The Palms of Sebring also reported Friday that a resident has tested positive after the National Guard and the Florida State Department of Health was invited in to test staff and residents. Last month, a staff member at The Palms tested positive for coronavirus.
Sunny Hills ALF is the only other long-term facility in Highlands County to have registered a positive case. The case there was also of a resident.
Miami-Dade’s numbers continue to climb and remain the leader in the state for positive cases with 13,664 confirmed and 468 deaths.
Nationally, the number of positive cases is 1,263,052 with 76,032 deaths and 195,036 recovered. Worldwide the number of positive cases has increased to 3,877,914 with 271,732 deaths.
For more information on COVID-19, visit floridahealthcovid19.gov.
In Highlands County, call 863-402-6800 or text hccovid to 888777.
TALLAHASSEE — Florida’s economic collapse due to the COVID-19 pandemic is expected to cause ballooning Medicaid enrollment that might blow a $1 billion hole in the state budget, according to new projections by the agency that oversees the health-care safety net program.
The dramatic rise in costs could exert additional pressure on Gov. Ron DeSantis and the Legislature to cut the budget as businesses shutting down and scaling back have dramatically reduced the main sources of tax dollars used to pay for state spending.
An Agency for Health Care Administration analysis of projected costs and enrollment obtained by The News Service of Florida shows that as many as 437,390 additional people might turn to Medicaid for health care in the coming fiscal year, which starts July 1.
The spike in enrollment could increase overall costs in the coming year by as much as $3 billion. Congress recently approved a 6.2 percentage-point increase in the federal government’s share of Medicaid costs, what is known as the Federal Medicaid Assistance Percentage, or FMAP.
But even with that boost, the extra money wouldn’t cover all of a $3 billion increase next year, and Florida would be on the hook for about $1.07 billion, the analysis shows.
“We will still see additional costs that the state will incur that won’t be covered by the enhanced (FMAP), just attributable potentially to increased enrollment,” Agency for Health Care Administration Secretary Mary Mayhew told the News Service.
Also, those projected enrollment numbers and costs are only for next fiscal year. The agency’s analysis anticipates that during the final three months of the current fiscal year — between April 1 and June 30 — an additional 109,348 people will enroll and that overall costs could exceed what was budgeted by $186.9 million.
Florida, the analysis shows, would be responsible for about $66.5 million of that amount, while the rest would be picked up by the federal government. But the increases in Medicaid spending in the current fiscal year might not be a problem.
“The real financial pressures,” Mayhew said, “likely will be felt more in fiscal year 2020 (the 2020-2021 year starting July 1).”
Mayhew stressed that the projected Medicaid caseload and cost estimates are a work product of her agency and are not official. Economists who serve on what is known as the state’s Social Services Estimating Conference develop the official estimates that the Legislature and governor rely on for budgeting purposes. Those estimates are based, in part, on data provided by the agency.
In developing its estimates, Mayhew said her agency reviewed how the financial crisis and recession that caused major problems in 2008 and later years affected Medicaid enrollment and costs. AHCA applied those trends to develop projected estimates for the current state fiscal year, as well as the following two fiscal years.
The projections could improve, Mayhew said, if the economy recovers quicker than anticipated. Also, the budget picture for Florida could improve if Congress agrees to an additional increase in the federal share of funding for Medicaid.
“I certainly think that there will be discussions about whether or not it should be increased,” she said of the federal share.
Long-time social services lobbyist Karen Woodall said the projected enrollment figures were on the high side. The trend data AHCA relied on for its assumptions, she said, included a two-year period following passage of the federal Affordable Care Act, when “huge amounts of money” were directed to Medicaid outreach and enrollment, leading to larger enrollment increases than traditionally experienced.
Also, she said that “unless (President Donald) Trump is successful in repealing it,” many people who lose their jobs should qualify for health insurance through federal insurance exchanges that are part of Affordable Care Act. Job loss is a qualifying event that triggers an enrollment opportunity.
Regardless of how high the state’s unemployment rate might soar, Medicaid eligibility requirements in Florida are restrictive. No able-bodied, unemployed, childless adult qualifies for the program, Woodall said.
Medicaid provided health care to about 3.76 million poor, elderly and disabled people in March, according to numbers posted on the AHCA website.
But it is a counter-cyclical program. When the economy sours, enrollment in the program increases, which, in turn, increases costs. Money needed to fund the program, however, also becomes more scarce as a cooling economy translates to less tax collections coming into the state.
In the past when there have been shortfalls in Medicaid, the Legislature has made budget reductions to try to make ends meet.
“Anytime you’re a Medicaid provider, you fear a recession because a recession can often lead to cuts in reimbursement rates,” Safety Net Hospital Alliance of Florida CEO Justin Senior said.
Senior, a former Florida Medicaid director and AHCA secretary, said now might not be the time to make payment cuts to providers, given that the economic downtown was caused by a health-care crisis..
“The traditional well that they (lawmakers) go to, which is to cut health care providers, isn’t necessarily wise, because you have to maintain your health care infrastructure,” he said.
Sen. Aaron Bean, a Fernandina Beach Republican who is in charge of developing the health-care budget in the Senate, agreed with Senior. He acknowledged that the Legislature has in the past four years cut funding to safety-net hospitals that provide large amounts of Medicaid and charity care.
“They have really stepped up, and they are going to be hurting,” Bean said.
Woodall said lawmakers have options and don’t need to resort to Medicaid reductions if the projections are accurate. Woodall said that Florida has an estimated $4 billion in reserves that could be used to help shore up the potential shortfall. Additionally, lawmakers could begin collecting taxes on more goods sold online, a move that has been rejected in the past but Woodall hopes gains momentum in the wake of the COVID-19 crisis.
“I don’t think the sky is falling, honestly,” Woodall said. “It’s just something that we’ll have to deal with. And I think we can.“