DETROIT LAKES, Minn. – With great challenges to U.S. agriculture from the COVID-19 pandemic, Congress appropriated billions of dollars to USDA to help prop up the farm industry.
“There will be some money to farmers,” said Congressman Collin Peterson, D-Minn. “They are going to get paid out by USDA on either a per acre or per animal basis. In the case of dairy, it’s a case of so much per hundredweight, and that should come out in the next week or two.
“There will be some direct help for farmers, and that will not have to be paid back,” Peterson continued via a phone-in town hall meeting. “That is coming directly out of USDA.”
He said that $25 billion was placed in the $2.2-trillion Coronavirus Aid, Relief and Economic Security Act (CARES) specifically for farmers. Secretary of Agriculture Sonny Perdue is in charge of figuring out how to distribute that.
“We’ve been responding,” Peterson said. “There was a provision from the last disaster bill for the sugarbeet industry and (we) were able to get a payment out to the sugarbeet farmers to keep them in business. I don’t know how they would have survived without that and trying to get ahead of it.”
Peterson added that he spent April 2-5 working with the dairy industry on how to get milk from farms to customers. Dairy leadership is concerned that if things are not handled correctly, there won’t be a dairy industry after the COVID-19 pandemic and its aftereffects are over.
He said if a milk processor tells a dairy farmer they have to dump milk, then the dairy farmer will still get paid for the milk. The problem is the market is collapsed, so the fear is that what dairy farmers will get paid won’t be sufficient to keep dairies in business.
Dairy farmers who have fewer than 200 cows and bought dairy margin coverage have protection for $17.50 per gallon of milk. That is not always profitable, but farmers will not be losing money.
“If you didn’t buy that coverage, I would say, ‘Shame on you.’ You’re going to be having $11 milk,” Peterson said. “But the milk being dumped, that’s a whole ‘nother issue and that’s a problem with the co-ops and processing and the way the system is set up.”
Secretary Perdue is working on this issue, he added.
According to Peterson, USDA has two pots of money – $25 billion given to support farmers, and another $33-$34 billion for the Commodity Credit Corporation (CCC).
“(Perdue) doesn’t want to spend all of the CCC money, because some of that goes to buy food stamps, food shelf, etc.,” Peterson said. “The dairy industry asked for $6 billion, cattle industry asked for $6 billion, hogs asked for $2 billion, chickens and turkeys are going to ask for $2 billion, ethanol asked for $5 billion, specialty crops asked for $6 billion and corn and soybean guys talked about and ran some numbers, and they are talking $30-$40 billion. You can see what the problem is.”
The total mentioned here is $57-$67 billion, Peterson said.
He added that farmers have been calling him and reporting on commodity prices. Cash prices of $2.85 per bushel for corn, and $8 for soybeans in mid-April were worrisome. With ethanol plants closing, corn prices will be challenged.
“We’re in a big world of hurt and we’re just working with the Secretary to see what we can do with the money he’s got to try to solve this, and I think it’s going to be unlikely we are going to convince anybody to give us more money, but maybe we will,” Peterson said. “We’ll see what happens, but I’m working on this every day, and I understand the need, but there’s a lot of other hands out there, as well.”
Peterson was also working on the many packer-related problems. Smithfield closed its plant in Sioux Falls, S.D., after nearly 300 employees tested positive for COVID-19. Smithfield was relocating finished hogs to their other plants as of April 13. Tyson Foods, Inc., in Columbus Junction, Iowa, was preparing to reopen as soon as possible. Pork producers were keeping in contact with processors and pork industry, as well as elected officials.