Farm groups: Thanks for aid, but send more
A wide range of farm groups reacted to the White House announcement of direct payments to farmers who have experienced COVID-19-related problems by saying thanks to the Trump administration, but then adding that more aid is necessary.
Farm Bureau President Zippy Duvall, who was present at the White House for the farmer-rancher event, said in a news release, “This aid can’t arrive soon enough as many farmers file for bankruptcy, facing unprecedented losses. We are grateful to the administration and to Congress for sending aid to America’s farmers and ranchers reeling from the breakdown in distribution channels resulting from COVID-19. Although supply is strong, the shutdown of restaurants and school cafeterias caused the markets for meat, dairy and produce to shrink drastically almost overnight.
“The Coronavirus Food Assistance Program is critically important, but the long-term effects of this pandemic are still rippling through the farm economy. The livestock sector is a prime example,” Duvall added. “As America begins to reopen for business, it’s imperative that we ensure the nation’s farms and ranches are able to hold on through this season and next to help put this country back on the road to recovery.”
In the release, Farm Bureau cited the following statistics:
Farm bankruptcies increased 23% in March 2020 compared to a year earlier.
By mid-April 2020:
Hog futures prices fell 53%.
Live cattle futures fell 25%.
Ethanol futures fell 33%.
Cotton futures fell 25%.
National Farmers Union President Rob Larew said, “We are glad that the administration is taking important steps to provide farmers with the support they so sorely need. While direct payments through the Coronavirus Food Assistance Program are a crucial stopgap that will keep farms afloat in the short term, some issues remain. For one, it doesn’t cover crops that farmers are putting into the ground now, which will likely see losses due to the lingering effects of the pandemic on agricultural markets. Additionally, the program does not factor in the price premium offered by alternative markets and production methods like local and organic, meaning that farmers who participate in those markets could see their incomes dramatically reduced. At an even greater disadvantage are poultry and contract pork growers, who were completely excluded from the program despite having endured significant challenges and financial damages as a result of meat plant closures.
“In addition to our concerns about producers whose needs are not covered by CFAP, National Farmers Union is also worried that the relaxation of payment limits will funnel the majority of assistance to large-scale operations while depriving small- and medium-sized operations of support. We understand that large operations are facing substantial losses, but they also tend to have the equity to access to other financial resources. Instead, the Trump administration should focus on keeping as many farmers as possible on the land by directing assistance to operations at highest risk of going out of business.”
National Sustainable Agriculture Coalition (NSAC) Policy Director Eric Deeble said, “The president recognized the importance of farmers who sell directly to their customers during his announcement of the CFAP program. It is unfortunate that the program USDA created does so little to support them. CFAP fails to deliver for many farmers who are the backbone of local, resilient, sustainable food systems.”
In a lengthy blog post, NSAC also said that an initial review “found several deficiencies that will limit the effectiveness of the program and the opportunity for many farmers to be compensated fairly for their losses.” NSAC said the payment structure is flawed, payments will not be based on actual losses, payment limits and eligibility criteria are weakened and the program has no commitment to equity or the next generation of farmers. (See link.)
Environmental Working Group Senior Vice President for Government Affairs Scott Faber said, “This rule will pour gasoline on a raging fire in farm country. Instead of helping small farmers on the verge of extinction, Secretary Perdue’s decision to increase payment limits for corporations to $750,000 will accelerate the decline of the family farm. When Secretary Perdue recently warned farmers to get big or get out, no one could have imagined he would use a pandemic to implement his vision for American agriculture. Even worse, none of these funds must be used to help protect food and farm workers, who are taking incredible risks to keep us fed.”
National Association of State Departments of Agriculture CEO Barb Glenn said, “The $16 billion Coronavirus Food Assistance Program is the first COVID-19 relief package crafted specifically for agriculture. While farmers and ranchers respond to uncertainty, we applaud the USDA for working to distribute relief funds as quickly as possible. There is still tremendous unmet need for agriculture and rural America. Additional resources will be needed to build resiliency for our post-pandemic rural economy.”
National Cattlemen’s Beef Association (NCBA) President Marty Smith, who was also at the White House ceremony, said, “America’s cattle producers have been hit very hard economically by this pandemic, so we’re pleased that this relief is one step closer to reaching the producers who need it. Still, this is just one step, and much more needs to be done to address the needs facing family cow-calf producers and stockers in the CFAP details that were released today. We will continue to push Capitol Hill for additional resources for cow-calf producers, backgrounders, and all other segments of the industry who may not sufficiently benefit from the program in its current form.”
National Pork Producers Council Assistant Vice President of Communications Jim Monroe said, “We appreciate that the USDA’s CFAP program announced today appears that it will reach more producers than the USDA’s relief program for hog farmers who suffered losses due to trade retaliation. We are assessing the CFAP program and the extent of its impact on pork producers. The financial and emotional crisis facing U.S. pork producers is overwhelming. They will lose more than $5 billion collectively for hogs processed into the food supply this year. And, because of pork harvest plant closures and slowdowns, they also face staggering costs associated with hogs that can’t enter the food supply. While harvest facility capacity is improving, it’s unclear when full capacity will be restored. Until additional capacity is restored, we will continue to have market-ready hogs back up on farms. Those hogs can become too large to be safely handled and accommodated by harvest facilities. NPPC continues to advocate for solutions to sustain pork producers through a crisis that, without additional government intervention, will likely lead to consolidation and contraction in a highly competitive farm sector.”
A spokesman for the National Chicken Council noted that the group had not asked for direct relief so far.
“Broiler growers are only now starting to feel the pinch from downtime and reduced flocks. Which is why we asked for aid in the next package,” he said. (See links.)
National Milk Producers Federation President and CEO Jim Mulhern said, “We welcome this federal dairy assistance, which is critically needed as the nation’s dairy farmers face an unprecedented market collapse. USDA’s plan will provide relief to many farmers, and we appreciate the department’s adjustments to payment limits, an issue which we raised prior to the department finalizing this package.
“Even so, we believe more flexibility in payment limits and some changes to payment calculations will be needed in future rounds of funding to meet the unprecedented challenges faced by producers of all sizes, in dairy and throughout agriculture.”
National Corn Growers Association President Kevin Ross said, “The COVID-19 pandemic has led to much uncertainty across farm country. This assistance is a first step to getting farmers, and our customers, back on solid footing.”
Ross said recent analysis conducted by NCGA projects a $50 per acre average revenue decline for the 2019 corn crop, with losses anticipated to be higher for the 2020 crop as two of corn’s largest uses, livestock feed and ethanol, have been especially impacted by COVID-19.
American Soybean Association President Bill Gordon, a soy grower from Worthington, Minn., said, “We are very pleased that livestock producers are getting much-needed relief. Soybean farmers stand with our livestock producers, so this is both needed help for us and welcomed news for our friends in livestock.”
Gordon noted that those qualified for assistance includes livestock producers who have an ownership interest in eligible livestock that have suffered a 5% or greater price decline as a result of the COVID-19 pandemic and face additional significant costs in marketing their inventories due to unexpected surplus and disrupted markets.
The National Association of Wheat Growers noted that the direct payment program covers durum and hard red spring wheat but excludes red winter, soft red winter, and white wheat.
“We want to thank USDA for its work to quickly put CFAP in place and for allowing certain classes of wheat to be eligible under the program,” said NAWG President and Cass City, Mich., wheat farmer Dave Milligan. “However, it is unfortunate that the program fails to take into consideration all six classes of wheat. USDA’s methodology behind CFAP neglects to incorporate price drops during the January to April timeframe when wheat farmers were marketing their crop or that local cash prices that farmers were receiving were less than futures prices in many areas of the country. As a result, most wheat growers won’t qualify for CFAP despite being impacted.”
“It is clear that all wheat producers experienced substantial price losses during the designated timeframe and should be eligible for assistance under CFAP,” Milligan added. “Wheat farmers continue to produce a high-quality crop but disruption in the supply chain, as a result of COVID-19, has negatively affected wheat farmers. The coronavirus pandemic is already impacting the wheat market and prices continue to drop even before the implementation of CFAP.”
Milligan noted that on April 23, NAWG sent USDA a letter demonstrating how the May contract on all three exchanges saw substantial price drops and partial recoveries during the January-April time period. (See link.)
The National Cotton Council said it “appreciates the Trump administration’s initiative to provide direct assistance to U.S. agriculture through the Coronavirus Food Aid Program (CFAP).” But the group added, “Noting that while the program will cover a portion of U.S. cotton producers’ market losses resulting from the COVID-19 crisis, the NCC is urging Congress to provide in the next relief package the necessary funding and policy direction to USDA to provide needed support for the 2020 crop year and the full cotton merchandising and textile supply chain.”
United Fresh Produce Association President and CEO Tom Stenzel said, “We applaud the announcement of a direct payment program for fruit and vegetable growers. That being said, we understand the resource and policy constraints that have been placed on USDA and the administration, and will work closely with Congress on implementing a stronger and more effective program in the next round of discussion with Capitol Hill. It is essential that USDA and Congress focus on programs that target resources for growers, grower-shippers, and others in the produce distribution supply chain that had direct job losses and immediate financial impact from government mandated closures.”
Western Growers President and CEO Dave Puglia said, “The administration is doing what it can to help as many farmers as possible from a limited source of relief funds. The tough part of this is that even with the increased cap on relief payments to individual farmers, the actual losses are far greater for many. By way of example, the average-sized lettuce farm in the West is 250 acres and requires about $5,000 per acre to grow the crop. The relief payment cap means the farmer who lost the entire crop when the food service industry was closed will have no relief for all but 50 acres of that loss.
“We appreciate all the administration has already done, especially on regulatory and administrative challenges, to keep our industry operating through the crisis. I urge the president and Secretary Perdue to closely monitor the full scope of economic damage done to fresh produce growers and other farmers and ranchers, and to work with Congress to close the gap in future COVID-19 relief efforts.”
Florida Fruit & Vegetable Association President Mike Joyner said, “We appreciate the administration’s efforts to help agriculture overcome many of the challenges we have faced during this pandemic. Florida specialty crop producers experienced devastating losses from the shutdown of the foodservice supply chain and slowdown at retail – losses far greater than the direct payment limits announced today will cover. We will continue to work with Congress and the administration to secure additional relief for hard-hit Florida growers of fresh fruits and vegetables.”
National Potato Council CEO Kam Quarles said, “Given the scope of this crisis, we knew the initial funding would be insufficient to meet the need of family farms. Based upon the limited resources announced today under this direct payment program, the potato industry is strongly urging Congress to act rapidly to provide more resources and flexibility to fill this huge gap and maintain producers’ livelihoods.”
“Over the past two months, the U.S. potato industry has urged USDA to move quickly to help clear product out of the supply chain and support family farmers with direct support,” said NPC President Britt Raybould. “With 60% of all potatoes grown in the United States destined for food service customers, the nationwide closure of restaurants, bars, schools, and entertainment venues dried up the potato supply chain. The resulting oversupply of 1.5 billion pounds of potatoes could fill the U.S. Capitol 14 times over.”
Quarles said in an email, “Our challenge is that the huge oversupply in potatoes comes from the food service side of our business. Those are potatoes for processing (huge bulk shipments, varieties specifically planted for processing). The retail channel has been holding up fairly well and those potatoes are most likely to go into the food boxes (consumer packs, relationships with distributors, varieties you would see in a grocery store, etc). Therefore, the potatoes that are most in need of government purchases are much less likely to be purchased by the government via these food boxes.Nevertheless, we are trying to make it work.”
In short, this new food box program was not designed to clear the oversupply facing the potato industry. USDA must move aggressively on additional surplus commodity purchases (such as Section 32 authority) in fresh potatoes, as well as potato products, in order to provide growers with options for their 2020 crop.
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