Coronavirus relief package welcome news in hurting ag economy

President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue recently announced that up to $14 billion will be available to help producers who face market disruptions and associated costs because of COVID-19 and the news was endorsed in the industry.

The aid was authorized as part of the Coronavirus Aid, Relief and Economic Security Act signed into law in March. The Coronavirus Food Assistance Program has already distributed one round of direct payments to agricultural producers whose markets have been disrupted or lost due to the pandemic, according to the U.S. Senate Committee on Agriculture, Nutrition and Forestry. On Aug. 11, U.S. Department of Agriculture announced approximately 60 additional commodities that would be eligible for assistance under CFAP.

U.S. Sen. Pat Roberts, R-KS, who chairs the Senate Agriculture Committee, thanked Trump and Perdue for their efforts to help farmers and ranchers who have continued to feed the world amidst depressed commodity prices and disrupted markets. 

“I have heard directly from our farmers and ranchers about the harsh conditions in farm country. I will continue to advocate for certainty and predictability for agricultural producers, especially during these challenging and unprecedented times,” Roberts said.

Congress authorized funding for CFAP in the CARES Act, which was approved by a unanimous vote in the U.S. Senate and signed by Trump into law on March 27. The CARES Act included $9.5 billion in funds to assist agricultural producers and resources to partially replenish the Commodity Credit Corporation. Additionally, Congress provided flexibility for Perdue to purchase commodities for emergency distribution in the Families First Coronavirus Response Act. 

House Agriculture Chairman Collin Peterson, D-MN, said the program will help but much work is ahead.

“There are some good things in this second CFAP plan, and the secretary should be commended for simplifying the application process for specialty crop growers and making sure livestock producers, like the turkey growers in my district, have what they need. It also expands the program to all classes of wheat and makes sure most commodities left out in the first round receive some support,” Peterson said. “And while this version of CFAP takes those good steps, there is some frustration over the participation rate among some sectors, including specialty crop producers.

“I still want to see help for the ethanol industry that has been hurt by the drop in fuel demand, textile mills that are helping create COVID medical supplies, pork and poultry producers that had to depopulate as a result of plant closures, and contract growers who have faced loss of income.”

House Agriculture Committee Ranking Member K. Michael Conaway, R-TX, said the program was needed relief for farmers, ranchers and dairy producers but expressed concern the Democratic leadership might block Commodity Credit Corporation funding that would halt farm bill funding and further COVID-19 relief.

“Sadly, the aid could have been much stronger had Congressional Democrats not blocked critical funding of the Department of Agriculture through the Commodity Credit Corporation during the CARES Act debate,” Conaway said. “Now, Democrats are trying once again to block USDA funding in the debate over the continuing resolution, which Congress must approve this month to keep the government open.”

Roberts took to the Senate floor to urge colleagues to replenish the CCC, which is used to implement farm bill programs and to provide additional assistance to agricultural producers affected by the pandemic. Failure to replenish the CCC would jeopardize the continued implementation of 2018 farm bill programs and hurt already struggling farmers, ranchers and growers.

U.S. Rep. Roger Marshall, R-KS, a member of the House Agriculture Committee, said farmers and ranchers never missed a day of work due to COVID but they faced serious challenges associated with the ongoing pandemic.

“This second round of payments continues this administration’s commitment to the agriculture industry and includes all Kansas wheat farmers, many of which were left out of the first round of payments,” Marshall said. “It is essential we continue to provide our hard working farmers, ranchers and farm families with the resources and assistance necessary to continue providing Americans and the world the safest, highest quality and most affordable food supply in the world.”

Additional comments

Grower groups and others organizations were supportive of the actions of the $14 billion program.

“It’s been a tough year for agriculture and there’s still a lot of uncertainty across the Corn Belt as we head into harvest,” said National Corn Growers Association President Kevin Ross. “We’re doing all we can to get back on solid ground but we can’t do it alone, which is why today’s announcement is a positive and welcome step forward.”

NCGA analysis projects a $59 per acre average revenue decline for the 2019 corn crop and an $89 per acre average revenue decline for 2020, compared to pre-COVID-19 projections. If realized, the 2020 crop year revenue would be the lowest corn revenues since 2006. Residual impacts from COVID-19 on corn prices are very likely to persist into 2021 and possibly beyond.

The Iowa Corn Growers Association said an Aug. 10 derecho damaged millions of acres of corn on top of the coronavirus’ impact.

Sign up for HPJ Insights

Our weekly newsletter delivers the latest news straight to your inbox including breaking news, our exclusive columns and much more.

“The Iowa Corn Growers Association has continually contacted Secretary Perdue by personally handing him a letter and speaking directly to him at the beginning of the month urging him and the administration to provide additional relief for our farmers including CFAP payments,” said ICGA President Carl Jardon.

Iowa Secretary of Agriculture Mike Naig said the program should help the state’s producers.

“The COVID-19 pandemic continues to create significant market and trade disruptions, and this poses very real challenges for Iowa farmers. The agriculture economy will rebound but it will take time,” Naig said, adding the program helps turkey producers because they have also been impacted by the coronavirus. “I’m very pleased to see Iowa’s turkey producers were included in this round of CFAP funding, as they too have been hit hard by the decreased demand at delis and quick-service restaurants.”

The National Cattlemen’s Beef Association said monies will help cattle producers.

“We are pleased to see that USDA is using unspent funds in the Coronavirus Food Assistance Program to provide further relief to cattle producers who have been hit hardest by the COVID-19 pandemic,” said NCBA Vice President of Government Affairs Ethan Lane. “The initial CFAP payments served as an important stopgap in the immediate wake of the coronavirus. Unfortunately, many in our industry are still reeling from abnormal marketing decisions they were forced to make in the spring, unprecedented supply chain disruptions, and an overall tumultuous farm economy. 

He said the organization is calling on Congress to eliminate the program’s remaining disparities.

Two farmer and rancher organizations also echoed the need for relief.

The second round of aid may provide added relief, according to the American Farm Bureau Federation. Almost $10 billion from the first CFAP provided much-needed support to livestock, dairy, non-specialty and specialty crop producers throughout the country. Many farmers were initially left out of CFAP, and although the program was expanded to include more commodities, aid was only made available for losses suffered before April 15, 2020, the AFBF noted. The deadline for most producers to apply for the first round of CFAP assistance expired on Sept. 11.

“Farmers and ranchers saw demand for their markets disappear during the initial shockwave of the pandemic. Even though concerns over food supplies have now subsided, the economic hardships are still taking their toll on farm families across the country,” said American Farm Bureau Federation President Zippy Duvall. “We don’t know when this pandemic will end and we are still feeling the effects of trade imbalances and severe weather. This lifeline will keep farmers and ranchers afloat as they continue to keep America’s pantries stocked.”

In a statement, National Farmers Union President Rob Larew conveyed appreciation for the financial support and urged that it be distributed to those who need it most. Citing economy-wide impacts and high unemployment rates, he also called on Congress to provide the relief hungry Americans and rural communities need to withstand this crisis.

“Even as restrictions ease, it is evident that farmers will be feeling the effects of the pandemic for quite some time. Markets have been slow to recover, prices remain low and processing facilities are still backed up. While these challenges persist, farmers will certainly need assistance to stay solvent—and we are grateful that USDA is providing it through another round of CFAP.

“This support is absolutely crucial—but it is just as crucial that it is distributed fairly and equitably. The first round of funding, though greatly appreciated, was not without its flaws; not only did it favor large farms over smaller ones, it also sent millions of dollars to foreign-owned operations and excluded some farmers entirely. With congressional oversight, we ask that USDA rectify these issues and ensure that payments are commensurate with demonstrated need.

“It’s important to note that farmers are by far not the only Americans in need of relief right now; millions are out of work and experiencing food insecurity, family-owned businesses are struggling to stay afloat, already strained rural hospitals are hemorrhaging money, and students without broadband access are falling behind in school. It’s unacceptable that it has been months since these groups have received any help at all; Congress must act quickly to provide the support that all Americans need to withstand this crisis.”

Dave Bergmeier can be reached at 620-227-1822 or [email protected].