Weekly Food & Agriculture Update 6.8

Monday, June 8th, 2020

WEEKLY FOOD & AGRICULTURE UPDATE

June 8, 2020


Contents
  • COVID-19 Updates
  • Big Picture Outlook
  • The Week Ahead
  • MTA in Action
  • A Quick Look Back
  • Contact the Team

COVID-19 Updates

Legislative Update– The Senate passed the Paycheck Protection Program (PPP) Flexibility Act last Wednesday evening and was then signed Friday by President Trump. While members on both sides of the aisle hoped the measure would pass by unanimous consent, the bill initially failed when Senator Ron Johnson (R-WI) opposed the first call. He and other Republican senators disagreed with the bill’s extension of the loan deadline from June 30th to December 31st, among other concerns. The bill passed upon a second vote after Senator Johnson was allowed to enter a letter into the record clarifying the authorization period.

The Senate will not consider another coronavirus related aid bill until after the July 4 recess, according to Senate Finance Committee Chairman Chuck Grassley (R-IA). The Chairman said the Senate and his committee are in a “mood of taking a very necessary assessment” of the impact of previous coronavirus aid legislation, noting unemployment insurance will not run out until the end of July. The House will remain out of session until the end of June, but committees will continue working towards passing twelve appropriations bills, and an infrastructure bill. It is expected that the House committees will act on fiscal year 2021 spending bills during the weeks of July 6 and 13 to have the floor votes take place the weeks of July 20 and 27.

Federal Update- Last week, China halted purchases of US soybeans and pork, a move that may impact the longevity of the Phase One trade deal between the two countries. This move was in response to President Trump’s actions taken at the end of May against China and the country’s response to COVID-19. The announcement comes just days after the USDA lowered agriculture’s expected forecast for the 2020 fiscal year to $136.5 billion, a $3 billion reduction from February’s forecast. Although China bought between two and three cargo loads of soybeans on Monday, concerns in the soybean market remain due partly because of competition with Brazil and because of relationship uncertainty with China. The forecast reported $1.9 billion lower than original estimates of soybeans. The department also expects lower corn, cotton, and wheat exports. A full copy of the forecast can be found here. Senate Finance Committee Chairman Chuck Grassley (R-IA) stated that although there has been elevated contention between the United States and China, he believes that China will fulfill its responsibilities under the Phase One trade agreement.

Industry Update– In a letter to the USDA, Representative Sanford Bishop (D-GA) called for continual expansion in rural states of the Supplemental Nutrition Assistance Program (SNAP) Online Purchasing Program. While thirty-seven states have been approved by the USDA to use SNAP benefits online, Bishop argued for increased access to local grocery stores and dollar store chains so SNAP recipients in rural areas have more accessibility to the program. The online program has only approved two national chains: Walmart and Amazon. This letter was sent just over a week after the USDA announced a large expansion to the program that would bring coverage to ninety percent of SNAP households.

The National Association of Wheat Growers (NAWG) sent a letter to Secretary Perdue stating their position on wheat growers’ eligibility under the Coronavirus Food Assistance Program (CFAP). The association stated they believe all classes of wheat should be available under the program, not just hard spring wheat and durum wheat. David Milligan, president of NAWG, said he believes the USDA’s decision to not include all classes of wheat does not reflect the economic impact that all wheat farmers are experiencing. He also stated that he believes more assistance will be necessary as the impacts of COVID-19 continue to unfold.


Big Picture Outlook

Food Prices Jump and Unlikely to Change– The coronavirus has certainly had an impact on US supply chains, and food and agriculture are no different. In April, the Labor Department reported a 2.6% increase on April overall food prices, the highest increase in forty-six years. Additionally, the department reported a 1.5% increase in dairy related products as well as fruits and vegetables, a 2.9% increase in cereals and bakery products, and a 4.3% increase in meat, fish, and eggs. While egg prices have fallen from three dollars a dozen to one dollar a dozen in some areas, meat prices are anticipated to stay high. Some slaughterhouses have had to temporarily close, causing meat supply interruptions while driving demand and prices up. While a part of the increased demand is attributed to consumer bulk buying, some products will still be above last year’s prices and potentially increase in the near future.

Bipartisan Bill Proposed to Assist Farmers and Climate Change– A bill proposed by Senators Braun (R-IN), Graham (R-SC), Stabenow (D-MI), and Whitehouse (D-RI) creates a voluntary opportunity for farmers and ranchers to generate and sell their carbon credits. The Growing Climate Solutions Act creates a certification program that allows the USDA to pay farmers for conservation methods such as reforestation, sequestering carbon in soil profiles, and capturing methane from livestock. The bill would also organize an advisory council made up of top scientists, conservationists, and agriculture experts to ensure the program stays relevant and responsive to the needs of producers, forest landowners, and carbon market participants. The program, while intended to further conservation methods surrounding agriculture, would offer a new revenue line for producers suffering economically from global trade tensions and COVID-19. In 2018, the average price for these credits was three dollars per ton.

ASF Cases Continue to Rise– The African Swine Fever (ASF) virus is reported to be worse in 2020 than in 2019. The virus has now spread to several foreign countries from China. Although tests are being conducted for a vaccination, there is currently no approved vaccine or cure and the virus kills almost one hundred percent of the animals it infects. Fears continue to grow among pork producers that it is only a matter of time before it shows up in the United States. It is estimated that approximately 100,000 hogs have already died this year, and 5.4 million infected or potentially infected pigs have been culled.


The Week Ahead

Tuesday, June 9
  • 10:00am EST: The Senate Committee on Energy and Natural Resources will hold a hearing to “Examine Wildlife Management in the Midst of the COVID-19 Pandemic.”
  • 2:30pm EST: The Senate Committee on Finance will hold a hearing on “Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance Curing the Pandemic.”

MTA in Action 

MTA Welcomes Summer Intern- MTA is pleased to welcome Idaho native, Dexton Lake, as the 2020 summer policy intern. Dexton will assist the MTA team with policy research, issues tracking, and other special projects to serve an ever-growing list of clients in the food, agriculture, and forestry sector. Dexton is currently enrolled at Utah State University in dual Bachelor of Science degrees and is a graduate of the Western College ofAuctioneering. Visit the MTA webpage to learn more about Dexton’s leadership and background.


A Quick Look Back