Minnesota dairy farmers urged to seek relief as market pressures continue

Otter Tail County dairy operators who missed Minnesota’s April 9 deadline for state relief were shut out of a round that could help cushion some of the damage from weak markets and tight margins. The 2026 Dairy Assistance, Investment, and Relief Initiative had $3 million available, but only for producers who filed on time and met the program’s production and coverage rules.

The Minnesota Department of Agriculture limited eligibility to principal operators of Minnesota dairy cow operations that produced less than 16 million pounds, or 160,000 hundredweight, of milk in 2022 and enrolled in six years of Dairy Margin Coverage during the Jan. 12-Feb. 26 signup period. That made the program a narrow bridge for farms already tied into federal risk management, not a blanket payment for every dairy operator in the state.

Payment levels have not been set, but the agency said the 2026 rate will be based on each applicant’s first 50,000 hundredweight of 2022 production. Officials said that payout will likely be lower than the first DAIRI round, which had $8 million in funding and paid 18 cents per hundredweight. The state expects payments to begin about a month after applications closed, leaving producers who did not apply to wait for another program or a change in the law.

Garrett Luthens, president of the Minnesota Milk Producers Association, said DAIRI is “more than just a safety net” and called it a “launch pad” for new and beginning farmers. His warning lands in a sector that has been shrinking for years: a summary of 2022 Census of Agriculture data showed Minnesota dairy farms fell 40% between 2017 and 2022, a drop that has pushed more pressure onto the remaining operations in places like Fergus Falls, Deer Creek and across Otter Tail County.

The state’s own dairy farm activity report shows the squeeze has not stopped. The Minnesota Department of Agriculture’s May 1 report listed 1,672 dairy permits statewide, up 3 from the previous month, including 1,524 Grade A permits and 148 Grade B permits. In a February House Agriculture Finance and Policy Committee discussion, Rep. Nathan Nelson said a bill could expand DAIRI to 30 to 40 additional dairy farmers, a change that would matter for producers whose recent production history left them outside the current rules.