Weekly Food & Agriculture Update 7.20

Monday, July 20th, 2020


July 20, 2020

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

COVID-19 Updates

Legislative Update– Senate Majority Leader Mitch McConnell (R-KY) said he expects to start briefing Senate Republicans on the next coronavirus aid package on Tuesday, the earliest talks among lawmakers could begin. In addition to issues like liability, which the Majority Leader has been pressing for, Senate Agriculture Appropriations Subcommittee Chairman John Hoeven (R-ND) stated the package needs to include more assistance to agriculture producers. Although the HEROES Act passed in mid-May, House Speaker Nancy Pelosi (D-CA) said she would be willing to postpone the House recess scheduled to begin at the end of July to reach an agreement with the Senate. As to the size of the package, Senator Hoeven stated he expects the Senate to use and discard parts of the HEROES Act to reduce its $3 trillion price tag.

Senate Finance Committee Chairman Chuck Grassley (R-IA) and Senator Joni Ernst (R-IA) are pushing for aid to ethanol plants to be apart of the next coronavirus aid package. The Chairman said the oil industry received aid from the Strategic Petroleum Reserve due to reduced road travel caused by the pandemic and that the ethanol industry needs similar assistance for the same reasons. Chairman Grassley added the long-term hope would be the economy picks up and people start driving, thus boosting the ethanol industry. Chairman Grassley additionally mentioned he would like to see provisions added in this next aid package for animal producers that had to depopulate their herds, something that wasn’t even discussed as part of the last package, but was included in the House HEROES Act.

Federal Update- The Bureau of Labor Statistics reported food prices and overall consumer prices individually rose 0.6 percent in June. While the food price increase wasn’t as steep as in March when food prices rose 2.1 percent, overall consumer prices had its highest monthly gain since August 2012. The food price increases occurred in meats, cereal, bakery products, and fruits and vegetables. The only product that saw a price decline was dairy, falling 0.4 percent.

Despite a flurry of agriculture purchases as part of the Phase One trade agreement with China, President Trump said he is not currently interested in discussing a Phase Two agreement because of the country’s response to the pandemic. In an interview last week, the President said “the ink wasn’t even dry, and they hit us with the plague.” Since the coronavirus outbreak, President Trump has often said the pandemic changed his views on the first phase of the agreement with China.

The number of individuals enrolled in the Supplemental Nutrition Assistance Program (SNAP) grew approximately seventeen percent from February to May in forty-two states. According to a study released by the Center on Budget and Policy Priorities, if this increase is similar across the nation, then the number of people utilizing SNAP will have risen from 36.9 million in February to approximately 43 million individuals in May. According to the study, this is a significant increase, as the Great Recession never saw a SNAP enrollment increase of more than six percent over a three month period. The states that saw the most increases in enrollment were Arkansas, Colorado, Florida, Georgia, Kentucky, Massachusetts, Michigan, Nevada, and Ohio.

Industry Update– The School Nutrition Association (SNA), which represents food service directors and school food manufactures, sent a letter to USDA Secretary Sonny Perdue insisting free meals for all students continue to be funded throughout the summer. While school lunch programs have been extended through the summer for students who present a financial need, the organization stated expanding to all students will help reduce costs and food waste. The organization also requested that USDA consider funding school lunch programs for the 2020-2021 school year in a similar way to the Summer Food Service Program (SFSP), to allow for grab-and-go lunches to reduce physical contact while schools are in session.

Big Picture Outlook

Spending Bills to Hit Floor Next Week– A package of four appropriations bills, also known as a “minibus”, is anticipated to reach the House floor for debate next week. Those four bills include spending for Agriculture-FDA, Interior-Environment, State-Foreign Operations, and Military Construction. The House Rules Committee will meet early in the week to discuss limiting debate and amendments as well as how to move the bills as quickly as possible while maintaining social distancing standards.

Chinese Corn Purchases Up– Last Tuesday, China made its single largest purchase of U.S. corn. The USDA reported that private Chinese exporters have purchased 1.762 million tons of corn for the marketing year that begins on September 1st. This is the second massive deal for corn in less than a week when the country purchased 1.365 million tons on July 10. The country also purchased 129,000 tons of soybeans for the 2020-2021 marketing year.

Farm Bailouts Reach New Highs– Farm bailouts under the Trump Administration have never been higher, rising from $11.5 billion in 2017 to more than $32 billion so far this year. A large portion of the spending this year is due to the pandemic but spending as a whole has been attributed to trade wars started by the administration. Several economic analysts have expressed concerns about the sustainability of these bailouts, saying the high amounts put a lot of trust in producers to use taxpayer money “correctly.” President Trump promised in a tweet that more assistance to producers would be granted because of Chinese tariffs, despite Secretary Perdue saying relief payments weren’t meant to be more than short-term assistance.

Trump Reverses NEPA Act– President Trump with the Council on Environmental Quality announced the final rule to rewrite the Nixon era National Environmental Policy Act (NEPA), which requires federal agencies to review the environmental impacts of proposed projects such as highways and pipelines. Republicans touted the decision to rewrite the policy, saying it will eliminate bureaucratic red tape that delays projects that could be done in a timely fashion. The National Cattlemen’s Beef Association and the Public Lands Council say it will “bring common sense back to an important rule” that protects land and water resources. Democrats and environmentalists disagree, saying the change will cut communities out of the decision-making process while ignoring the climate crisis.

The Week Ahead

Tuesday, July 21
  • 1:00 p.m. (EST) The House Committee on Agriculture will hold a hearing on “An Overview of the Farmers to Families Food Box Program.”
Wednesday, July 22
  • 10:00 a.m. (EST) The Senate Committee on Environment and Public Works will hold a hearing to “Examine the Increased Risk of Zoonotic Disease from Illegal Wildlife Trafficking.”
Thursday, July 23
  • 10:00 a.m. (EST) The Senate Energy and Natural Resource Committee will hold a hearing to “Examine the Impacts of the COVID-19 Pandemic on Users of Public Lands, Forests, and National Parks.”
  • 2:00 p.m. (EST) The House Ways and Means Committee will hold a hearing on “Trade, Manufacturing, and Critical Supply Chains: Lessons from COVID-19.”
To see a full list of House and Senate Committee business, visit here.

MTA in Action 

Patterson to Participate in Panel– MTA’s Barbara Patterson will participate in a career development panel with the Council of Food, Agriculture, and Resource Economics for young professionals and students interested in agriculture and applied economics. Other panelists include leaders from American Farm Bureau Federation, Agri-Pulse, and the United States Department of Agriculture. More information and registration can be found here.

A Quick Look Back

Contact the Team 

Feel free to contact Mike Torrey, Tara Smith, Cassandra Kuball, Jessica Kuney , Barbara Patterson, or Perry Harlow with any questions or comments.