April 20, 2020

Inside this issue
  CARES Act Payments  
  Overview

On Friday, April 17, U.S. Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP). This new U.S. Department of Agriculture (USDA) program will take several actions to assist farmers, ranchers, and consumers in response to the COVID-19 national emergency. Details on how this program will be implemented and administered are still being developed and once the specifics are further outlined, we will be communicating that additional information.
CFAP will use the funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and other USDA existing authorities. The program includes two major elements:
  1. Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
  2. USDA Purchase and Distribution: USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat. They will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith-based organizations, and other non-profits. 
Direct Assistance
 
USDA is expediting the rulemaking process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June.
 
USDA will provide $16 billion in direct payments to farmers and ranchers including:
  • $9.6 billion for the livestock industry
    • $5.1 billion for cattle
    • $2.9 billion for dairy
    • $1.6 billion for hogs
  • $3.9 billion for row crops
  • $2.1 billion for specialty crops
  • $500 million for others crops
Producers will receive a single payment determined using two calculations:
  • Price losses that occurred January 1-April 15, 2020. Producers will be compensated for 85% of price loss during that period.
  • Second part of the payment will be expected losses from April 15 through the next two quarters and will cover 30% of expected losses.
The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity.
 
Qualified commodities must have experienced a 5% price decrease between January and April and we are still waiting on USDA to give us a list of what the covered commodities are. However, this chart, developed by American Farm Bureau Federation (AFBF), has been developed to show price changes since January.



Food Purchases
 
USDA has authorized an additional $873.3 million in funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis, and food bank needs.
 
The FFCRA and CARES Act provided an at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank need and product availability. 
 

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  Livestock Updates  
  The Farm Bureau and other livestock organizations have sent a letter to President Trump underscoring the importance of livestock processing facilities and urging that they be allowed to continue operations while safeguarding the health and safety of their employees.  We are concerned about possible disruptions in the food supply chain and the letter to President Trump emphasized the critical nature of meat processing facilities. This letter follows increasing reports of facilities that have either been temporarily closed or that have suspended operations due to the COVID-19 emergency. 
 
While the health and safety of our communities, families, and workers across the supply chain is our top priority, meat packing plants, dairy processors, ethanol plants and other processing facilities all play a vital role in delivering the food and fuel Americans will continue to depend on in the long days ahead.
 
Farm Bureau is working with partners across the food chain and the Administration to ensure the food supply remains safe and strong. Ensuring farmers and ranchers can stay in business is important not only through this crisis but to prevent another crisis down the road.
 
The dramatic increase in demand from panic buying when the crisis first began, the shift in purchasing decisions from restaurant to retail, and the rising rate of worker illness have all placed a strain on processing plants.  We are monitoring the impact of recent closures of several meat packing plants. While supplies in storage remain strong and some packing needs can be diverted to other plants, processors are facing capacity challenges with the increased workload.
 
Farm Bureau is continuing to urge USDA to work with the appropriate federal agencies in ensuring U.S. farmers are not unfairly disadvantaged during this unique period.  Livestock producers have expressed concern regarding market manipulation and Farm Bureau has urged USDA to monitor the situation to protect producers and consumers alike from price manipulation.
 

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  PPP Program Updates  
 

Just 14 days after enrollment opened for the Paycheck Protection Program (PPP), the $349 billion appropriated for the program was depleted. Congress is working to increase the funding levels, but the authorization is being delayed along party lines.

Farmers and agribusiness are encourage to check out the Small Business Administration's (SBA) website for updates. The most up to date information will be available here once the new funding is available. 


 

Farm Bureau is working with Congress to increase Ag producer access to future PPP funds.  Farm Bureau has requested that Congress add additional funding to the Paycheck Protection Program and include several important technical corrections.

Farm Bureau's requests include:

·         Increased funding

·         Clarity on farm eligibility in the PPP

·         Increased eligibility for ag operators

·         Definition for principle place of residence

·         Explanation of rent and utility costs

·         Financial Lending availability

·         Expanded eligibility for agricultural organizations

We are urging Congress to act as swiftly as possible to make sure these funds are available. There is optimism that a deal will be completed by the end of the week. Members are encouraged to contact their congressional offices showing their support for the program.  

 

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  Conclusion  
 

We know that this is a busy time for everyone, and we do not want to bombard you with emails and newsletters while you are trying to dodge rain (or snow) and get planting. However, we will be working to make sure you have the most accurate and up-to-date information available. As more details become available, and the Farm Service Agency (FSA) announces program sign ups and eligibility, we will be sure to communicate that to you. Farm Bureau remains vigilant in identifying and helping to address issues with the Administration and Congress to protect our food supply and ensure continued access to it. We are grateful to the men and women up and down the food supply chain - from farmers to truck drivers to grocery store workers - who are ensuring that plenty of food is available. And of course, we are grateful to the health care workers and emergency responders taking care of those who become ill. Our prayers are with them.

Stay safe and healthy. 

 

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The Iowa Farm Bureau Congressional Update is prepared by:
Daniel Heady, National Policy Advisor

5400 University Avenue, West Des Moines, IA 50266
www.iowafarmbureau.com
Contact National Policy Advisor:

Daniel Heady
dheady@ifbf.org
515-225-5572