What the CARE Act means for agriculture, cattle producers
Friday, March 27, the U.S. House approved the Coronavirus Aid, Relief and Economic Security (CARES) Act. The bill was approved by the Senate on Wednesday by a 96-0 vote. President Trump signed it Friday afternoon.
The vote passed the House after four and a half hours of debate, with nearly all speakers in favor of the bill, according to The Hagstrom Report. Some did voice reservations about the $2 trillion price tag, but all agreed it’s necessary, whether for the aid it offers rural hospitals, meals for school children or aid for agriculture. While the vote showed strong bipartisan support, the commentary wasn’t unified. According to The Hagstrom Report, Democrats praised Senate Democrats and their own leaders for making changes to the bill, while House Ways and Means Committee ranking member Kevin Brady, R-Texas, said, “Senate Democrats, aided by Speaker [Nancy] Pelosi [D-Calif.] recklessly delayed this bill for days and used this crisis to advance a frivolous political agenda. It failed, and the Senate found unanimous, if not perfect, common ground.”
The agreement reportedly includes a $14 billion increase in USDA’s borrowing authority under the Commodity Credit Corporation, consistent with a long history of the CCC being tapped to responsibly support agriculture in times of crisis, and $9.5 billion to assist specialty crop producers, direct retail farmers and livestock operators.
What, exactly, that will look like is yet to be determined, but the beef industry and those who represent beef states are trying to make sure beef producers are considered during that decision-making.
House Agriculture Committee Ranking Member K. Michael Conaway (R-TX) said, in response to the passage of the bill, “Today, the House passed legislation that will provide immediate economic relief to all Americans to help our country get through these extremely trying times. Included in this relief package is critical help for our farm and ranch families, who are officially recognized by the U.S. government as critical infrastructure and must keep working in order to keep our grocery shelves stocked. Our farm and ranch families are living up to this charge and getting it done even under the enormous financial strain of seven straight years of economic recession in agriculture. As they continue to care for their livestock and head into the fields to plant, I strongly urge the Administration and USDA to work swiftly to get this much-needed aid to our nation’s farmers and ranchers without delay. If this legislation is to succeed in bolstering the economy, the overriding goal must be to get aid to all Americans as quickly as possible, including farmers, ranchers, and rural America.”
Jess Peterson, senior policy advisor for the United States Cattlemen’s Association, said his organization commends the bipartisan effort that went into this bill, but they’ll be watching and working with the appropriate agencies to make sure the help gets to where it’s needed. “We look forward to working with the House and Senate to ensure there will be payments as needed to cattle producers, cattle feeders and backgrounders. That those payments, as needed, are issued to producers, and not going to any of the multi-national packers. We want to make sure it goes to the people on the ground.”
American Farm Bureau president, Zippy Duvall, said, “Thanks to Leader McConnell and all the senators who diligently fought for farmers and ranchers to ensure they have our backs in the unprecedented COVID-19 crisis. The aid to farmers in this package, including funding for the CCC and the Office of the Secretary, will allow USDA to begin crafting an appropriate relief program for agriculture.
“America’s farmers and ranchers face enormous volatility as markets and supply chains rapidly react to changes, but I’ll say again that farmers and ranchers will not let Americans down. All members of Congress must understand that farmers have almost no control over the prices of the goods we produce, so fulfilling our commitment to America requires a team effort.”
Many industry organizations share common concerns about implementation, and are working to make sure the industry is represented in the agencies making decisions about the funding allocations.
Peterson said his organization has been working with economists and agencies to put together numbers that will be realistic and reflect the needs of the industry, based on the 2020 February projection and outlook. “We have a pricing mechanism in place. It’s a matter of USDA acknowledging that and working through it accordingly. We feel comfortable with the numbers we’ve looked over. We’re working very closely with Congress and the USDA to ensure that when the payment program is formalized, we’re in alignment.”
Jodie Anderson, executive director of the South Dakota Cattlemen’s Association, has been working with South Dakota’s representatives to ask that beef producers be given strong consideration in the allocations.
“We don’t really have access to any other programming, like other ag products,” Anderson said. “We haven’t been party to any of the previous market facilitation payments that have been happening over the last year. SDCA and NCBA have been arguing that the assistance needs to be focused on the people who were most targeted by the market downturn.”
Scott Edoff, president of the South Dakota Stockgrowers Association agrees that the assistance needs to go to the people who are operating on the tightest margins, for whom this assistance could make the difference between staying in the ag business or not.
“I just want to see it go to the struggling young people who aren’t going to get their bills paid,” he said. “I don’t want to see them give it to the nonprofits who are not paying taxes. Give it to the average working people who need it.”
Anderson concurs, “I don’t think sending everyone $5 per cow is the answer. Then no one gets enough to do any good. That may be the easiest thing to do to get it done fairly, but we’re advocating for a better way.”
Edoff further hopes the market volatility will be the incentive needed to address the issues the industry all agrees are present in the cattle market.
“I’d like to see them fix our cattle markets instead of giving us the handout. We’d be better off if they could make it a better, more open and fair market than give us a handout. Break up the packers a little bit. Make it more open and honest market out of it, where it’s transparent and anyone can follow it, instead of this secretive market they have going now.”
Anderson says the economic uncertainty has highlighted two things for the cattle market. “One, the futures market is not working as the risk management tool it was intended to be. The futures market is setting the cash market, instead of vice versa. That’s something we really have to address moving forward. Second, we don’t really have a crop insurance-like program for livestock. A big piece of that is we can’t seem to agree on what that should look like. We, as an industry, have never had a unified voice to ask for it. Maybe it’s time we revive that a little.”
Peterson said that while the markets and the CARE Act are two different issues, the last few weeks of market volatility have piqued the interest of representatives and agencies that oversee the markets. “The key thing I can’t emphasize enough is we need to improve our competitiveness and true price discovery in the cattle market,” he said.
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