Weekly Food & Agriculture Update 4.20

Monday, April 20th, 2020

WEEKLY FOOD & AGRICULTURE UPDATE

April 20, 2020

A quick look at what’s happening in Washington, D.C. that’s impacting food and agriculture. If you would like to subscribe to the receive the updates right to your inbox, please contact Marissa Dake


COVID-19 Updates

Legislative Update– Congress announced another recess extension and will resume session on May 4. Despite the extension, Congress continues to work out the details for additional funding for the Paycheck Protection Program (PPP) and other COVID-19 needs. Signaling the deal is close, the House announced over the weekend it may hold a vote on the package as early as Wednesday. The bill is expected to include at least $300 billion more for PPP, in addition to $50 billion for the Small Business Administration’s EIDL program, $75 billion for hospitals, and $25 billion for testing. The SBA exhausted the original $350 billion in PPP funds, less than two weeks after the program launched. The PPP report showed that less than 1.2% of the $350 billion in approved loans went to the agriculture, forestry, and mining sector.

As many states begin extending their stay-at-home orders, House Democrats have proposed a temporary rule change that would allow proxy voting during the coronavirus crisis. The ruling would allow absent House members to vote through a designated lawmaker who is present at the US Capitol.

Federal Update– USDA announced its initial plans to aid the struggling agricultural economy late Friday, with the $19 billion Coronavirus Food Assistance Program (CFAP). The program includes $16 billion for direct payments to farmers and $3 billion for commodity purchases of meat, dairy, and specialty crops. Senate Agricultural Appropriations Chariman John Hoeven (R-ND) said the direct payments will be split into $9.6 billion for the livestock industry, $3.9 billion for row crop producers, $2.1 billion for specialty crop producers, and the remaining $500 million for other crops. USDA anticipates direct payments to go out as early as May. The agency is also hosting a webinar on commodity purchases this Tuesday to provide information for interested parties. USDA’s Agricultural Marketing Service (AMS) plans to use the procured food to provide food banks and other non-profits with pre-approved boxes of fresh produce, dairy, and meat products.

Meanwhile, President Trump has assembled multiple groups to advise and guide the Administration in reopening the US economy once the global pandemic subsides. The “Opening Up America Again Congressional Group” includes 97 lawmakers, 17 of which sit on committees that oversee agriculture issues, including Reps. Davis (R-IL), Fudge (D-OH), and Panetta (D-CA), and Sens. Roberts (R-KS), McConnell (R-KY), Durbin (D-IL), and Klobuchar (D-MN).

Another task force that President Trump formed is comprised of nearly 200 private-industry leaders. The “Great American Economic Revival Industry Group” includes 11 agriculture organizations and businesses, as well as 23 food and beverage groups. Among them are American Farm Bureau Federation, ADM, Cargill, Coca-Cola, PepsiCo, and Yum! Brands, to name a few.

Industry Update– Multiple industry groups responded to USDA’s Coronavirus Food Assistance Program (CFAP) announcement by applauding the agency for their support for farmers and ranchers. Among the organizations that have responded are American Farm Bureau Federation, American Soybean Association, Edge Dairy Farmer Cooperative, International Dairy Foods Association, National Corn Growers Association, National Farmers Union, and United Fresh Produce Association. Despite gratitude for USDA announcing their plans to support the agriculture industry, many groups are skeptical that the farm rescue effort is big enough.


Big Picture Outlook

Meat Supply Chain Issues Concern Ag Industry– Several pork, beef, and poultry processing facilities have temporarily closed their doors to address outbreaks of the novel coronavirus amongst employees. These closures present unprecedented challenges to the animal protein supply chain. Some company executives have gone as far as warning of a potential meat shortage. Additionally, animal producers are not alone with their worries about how the processing plant closures will affect their operations. The animal feed supply industry, such as corn, soybean, and cotton, are also experiencing disruptions to their operations due to decreased demand for animal feed and declining futures prices. Furthermore, several sectors across the supply chain are facing labor shortages, including transportation of animal products off the farm and from packers to retailers.

Future of China Trade Deal Uncertain Amidst Global Pandemic– Since signing “phase one” of the trade agreement with the US in January, China has made large increases in purchases of soybean, pork, and cotton. Recently, China announced that it has imported more than $5 billion worth of US agricultural goods in the first quarter of 2020. The agreement requires China to purchase $32 billion more in US agricultural products over the next two years. However, even before the global pandemic, trade experts questioned whether China would be able to fulfill their purchasing promises. The economic damage from the novel coronavirus is likely to complicate and impede future opportunities for the two countries to reach a comprehensive trade agreement this year.


The Week Ahead
The House and Senate remain in recess until at least May 4.

MTA in Action

MTA Executive Vice President Tara Smith was interviewed by Agri-Pulse for their “Meet the Farm Hand” series. Smith discusses her childhood growing up on a farm, to her time working with Senate Agriculture Committee Chairman Pat Roberts (R-KS). Click here to watch the full interview.


A Quick Look Back