Farm Bureau: Prices down, more aid needed, Perdue in charge
American Farm Bureau Federation President Zippy Duvall today detailed farm price drops today and said more aid will be needed in future coronavirus aid packages.
On a phone call to reporters, Duvall noted that dairy prices have dropped 26 to 36%, the futures price for cotton is down 31%, hogs down 31%, cattle down 25%, corn down 14% and soybeans down 8%.
Duvall said that even though the Coronavirus Aid, Relief, Economic Security (CARES) Act provided an additional $14 billion for the Commodity Credit Corporation, created a $9.5 billion emergency fund to help livestock, dairy and specialty crop farmers and included other provisions for the Agriculture Department to buy foods, Farm Bureau officials have “realized very quickly that that amount of aid is not enough to sustain us” and that“ it’s going to take is a lot more” to keep farmers going.
Asked which division of USDA is in charge of getting the aid out to farmers, Farm Bureau Vice President Dale Moore said that Agriculture Secretary Sonny Perdue is in charge.
“The secretary has a fairly expansive range of authorities. From what we understand he is working to look at all the angles,” Moore said.
Duvall added that Perdue told him this week the farm aid is “a very complicated deal,” that he “wants to be fair to everyone” and get the aid out as quickly as possible, but that he could not give a timeline on when the aid would arrive.
Paul Schlegel, vice president for public affairs, said that Farm Bureau is preparing a letter to Perdue on how the aid should be handled and that the organization hopes to send it today.
An aide said that the letter would not differentiate between the use of the Commodity Credit Corporation authority, which is usually used to aid crop farmers, and the emergency fund, which has been designed to help producers who do not get aid through the Title I programs.
Schlegel added, “This is an extremely fluid situation. We are learning as we go as to what those needs are and what we can do about it. We don’t have concrete asks at the moment.”
Duvall said that low prices “do not tell the whole story” of the impact of the coronavirus crisis.
He noted that consumers have seen empty dairy cases while dairy farmers have been dumping milk because they don’t have buyers. He said a Walmart executive told him today that there was a shortage of milk initially, but that it has been resolved.
Alan Reed, a dairy farmer from Idaho, noted that cows need to be milked once or more daily in order to maintain good health. Reed said he owns retail stores, but sees very little traffic in them.
“It is puzzling to have a product and no place to go with it,” he said.
There was a surge of demand for beef and no shortage of supply, but prices went up while prices paid to cattle farmers went down, Duvall pointed out.
Consumer demand has risen in grocery stores, but that “pales in comparison” to the loss of sales to restaurants, schools and universities.
“It is not simply a matter of supply and demand. The entire supply chain is trying to adapt,” he said.
Veronica Nigh, a Farm Bureau economist, also noted that the decline in ethanol should be taken into consideration. In addition to the problems of corn farmers, the decline in ethanol production is reducing the supply of dry distillers grain that livestock producers use for feed and CO2, a gas used in meat processing.
Peter Bakken, a cattle farmer in southwest Minnesota, said that a call from an investment banker showed him that people are not as aware of the problems that coronavirus has caused in agriculture as they should be
The banker said he knew what was happening in the stock market, but wondered what was happening with cattle. Bakken said that “for the most part” his business is operating as usual while he practices care to avoid being infected with the coronavirus. Bakken said he is also focusing on keeping costs down.
Jim Alderman, a vegetable farmer from Palm Beach County, Fla., said that his business has been damaged because “the food service industry is basically shut down.” Alderman said he was referring to restaurants, clubs, cruise ships and Disney World.
Alderman said he still has “some fairly decent retail business,” but that squash has to get picked daily or it gets too big to sell
But the current price — $4 for a half bushel box of squash — is “way below” the cost of production including picking and packing, he said. Farmers have to keep on picking in order to prepare the ground for the next crop, he added.
In a month or six weeks, he said, the harvest will be over in South Florida and the same problems will be seen in more northern states.
Alderman complained that, while American produce farmers can’t find a market, produce is still coming in from Mexico, Honduras, and Guatemala.
“We are in a bad situation,” Alderman said, noting that he started farming in 1979, has been through hurricanes and other weather disasters, but ”this is something we have never seen.”
Asked by The Hagstrom Report whether products could be diverted to food banks, Moore said Farm Bureau is talking to food banks about delivering food to them The idea is particularly relevant for farmers who sell to farmers markets because many farmers markets already have relationships with food banks, he said.
Alderman said he would be happy to provide food to food banks if they would pay for the cost of picking, packing, cooling and shipping the products. Alderman said that he has donated excess food to food banks in the past, but has not heard from any during the coronavirus crisis.
Getting milk to food banks is “a logistical challenge,” Reed said.
And Bakken noted that meat going to food banks has to be federally inspected.
But he added that local residents have shown an interest in buying meat “off the farm” to top up their personal lockers.
–The Hagstrom Report
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