President Donald Trump’s historic move to ensure meatpackers stay open is being cheered by producers who are facing a collapse in livestock prices and, in some cases, having to kill their animals. But the industry will be closely watched to see whether the action worsens the outbreaks that have killed at least 20 packing plant workers.
The executive order released Tuesday night authorizes USDA to “ take all appropriate action” to ensure that packing plants stay in operation “consistent with guidance” issued by CDC and OSHA on Sunday for protecting workers form the COVID-19 virus.
In a statement, USDA said it would work with packers “to affirm they will operate in accordance with the CDC and OSHA guidance, and then work with state and local officials to ensure that these plants are allowed to operate to produce the meat protein that Americans need.”
Trump move met with mixed reaction
Zippy Duvall, president of the American Farm Bureau Federation, says he hopes the president’s action “will protect the health and safety of workers while keeping farmers and ranchers in the business of providing food for families across America.”
The top Democrat on the Senate Agriculture Committee, Debbie Stabenow, criticized the president’s intervention, saying he failed to put forward a plan to adequately protect workers. “Instead of using the Defense Production Act in a way that could put workers at risk, it should be used to produce supplies that will protect employees and our nation’s food supply,” Stabenow said.
Iowa GOP Sen. Chuck Grassley welcomed the order but said in a tweet that packers should follow the CDC/OSHA guidance and that the government should help them get personal protection equipment and testing capability.
Ag chair pledges overhaul of crisis management
House Agriculture Chairman Collin Peterson is promising to conduct a “top-to-bottom” review of how the crisis is being handled to develop a plan for responding to future outbreaks.
"We’re going to question everything that’s going on,” the Minnesota Democrat told reporters on Tuesday. He said he wants to direct money to develop a “FEMA-type plan that’s ready to go when we hit the next crisis.” FEMA is a reference to the Federal Emergency Management Agency.
He went on, ”Everything is going to be on the table. Things are not going to be the same.” He suggested the next crisis is likely to be African swine fever, the disease that decimated Chinese pork production last year.
Take note: Peterson also says he won’t sign off on more funding for direct farm payments unless the agriculture committees have a say in how it’s spent. “There’s not going to be a bill to give (USDA) 50 billion without any strings attached,” Peterson told reporters. Read our story here.
Study: Payment limits hit range of dairy farms
A new analysis from Texas A&M University puts some fresh numbers on the damage that the COVID-19 crisis is doing to U.S. agriculture. The analysis, based on A&M’s database of representative farms, estimates net cash income for dairy operations will fall 58% this year because of the pandemic, while beef earnings will drop 47%.
Net cash income will drop 18% for cotton growers and 15% for feed grain and oilseed producers, according to the analysis presented by A&M economist Bart Fischer at a Texas Ag Forum webinar.
Payment limit impact: The analysis also indicates that the proposed payment limits for USDA’s upcoming pandemic relief payments will hurt a variety of dairy farms across the country. Each recipient would be limited to $125,000 per commodity.
The representative farms that could be affected by the limit include a 1,000-head operation in Wisconsin and 1,200-cow farm in New York state. The Wisconsin farm, for example, is expected to see its net cash income cut by more than $500,000. The average cut across all the representative farms nationwide is $345,000.
Larger farms in Texas and Idaho, with 3,800 and 3,000 cows respectively, are projected to lose more than $1.2 million in net income.
Take note: Texas Rep. Mike Conaway, the top Republican on House Ag, said earlier on the webinar that the payment limit is “unworkable.” “We’ve shared that with” Ag Secretary Sonny Perdue. “He understands it.”
China lagging in ‘phase one’ pledges
China has made some substantial purchases of U.S. soybeans, corn, wheat and beef in recent weeks, but the country is going to have to buy a lot more at a much quicker pace to even come close to honoring the import commitments it made under the “phase one” trade deal, says former USDA Chief Economist Joe Glauber. He’s pessimistic that China will do it.
China says it bought $5 billion worth of U.S. ag commodities in the first quarter, but to get to the promised year-end total of $36.5 billion, it’s going to have to more than double its purchases over the next three quarters, Glauber said Tuesday in a University of Illinois Farmdoc webinar.
“I think we’ll be lucky to get to the 2017 level,” said Glauber, referencing the baseline of $24 billion in imports that used to negotiate “phase one.” China pledged to buy $12.5 billion more than the baseline in 2020 and $19.5 billion more in 2021.
Rising crude oil and biofuel supplies to deepen ongoing political battle
A top ag economist expects the political battle between oil and biofuel groups to deepen as the crude oil and biofuel supplies continue to grow.
AgResource Economist Dan Basse said in a Farm Foundation webinar Tuesday that ethanol producers who’ve closed plants won’t restart operations until they see the prospect of very good margins for an “extended period of time.”
Meanwhile: A coalition of conservative groups including Citizens Against Government Waste, the Competitive Enterprise Institute and Heritage Action for America is calling on President Trump to waive the 2020 biofuel mandates. Because of the pandemic the mandates will exceed “the amount of biofuels that consumers want or need and will result in unnecessary economic harm,” the groups say.
Research advocates fault funding shortfall
The agricultural research funding drought must end, a new report from the Supporters of Agricultural Research (SoAR) Foundation says, citing examples of how targeted federal grants have helped to increase blueberry production, make wheat and barley adaptable to warmer weather, and identify a gene in pigs resistant to porcine reproductive and respiratory syndrome.
“Innovations developed today will feed our nation and the world for generations,” SOAR President Thomas Grumbly said. “But scientists need grants to cultivate those advances. We need to keep researchers hard at work now more than ever.”
SOAR pointed to funding levels for the Agriculture and Food Research Initiative, “USDA’s flagship program for competitively awarded research grants.” Authorized at $700 million in the 2008 Farm Bill, SOAR said “budget politics every year prevent the program from hitting that level.”
AFRI is funded at $425 million for fiscal year 2020 and the Trump administration’s FY 2021 proposal is for $600 million.
He said it. “I am sick and tired of answering questions I can’t answer.” – House Ag Chairman Collin Peterson, D-Minn.