Weekly Food & Agriculture Update 9.21

Monday, September 21st, 2020


September 21, 2020

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

COVID-19 Updates

Legislative Update– Lawmakers remain in a stalemate on COVID-19 relief, although a bipartisan caucus of fifty House members, called the Problem Solvers Caucus, released a $1.5 trillion proposal they hope will push Congress and the White House toward a compromise. White House Chief of Staff Mark Meadows said the Trump administration is willing to consider the proposal to bolster the economy and health care systems. The proposed legislation includes funding for schools, the Paycheck Protection Program (PPP), the Postal Service, and COVID-19-related testing and healthcare. For food and agriculture, the proposal includes $25 billion for agriculture and aquaculture producers and a fifteen percent increase for the Supplemental Nutrition Assistance Program (SNAP). House Speaker Nancy Pelosi (D-CA) said the bill falls short of appropriate response to COVID-19 related issues that have developed since May, when the last package passed. The House is scheduled for a recess beginning October 2 through the election, but Speaker Pelosi has noted she will call House members back if a deal is reached.

Federal Update- Although food prices at grocery stores were up 4.6% in August 2020 compared to August 2019, the rate of increase for bakery and meat products slowed in July and August, according to the U.S. Bureau of Labor Statistics. These products were some of the hardest to find at the start of the pandemic, which caused major price spikes in May and June. However, in August the meat, poultry, fish, and eggs category had a price decline of 4.4 percent, while cereal and bakery products declined 0.2 percent. Other food categories, such as fruits and vegetables, dairy, and nonalcoholic beverages all saw an increase of no more than 1.5 percent.

On Thursday, the White House and the USDA announced an additional $14 billion is available for agricultural producers who are facing marketing disruptions and associated costs because of COVID-19 under the CFAP 2 program. Additional commodities have been included such as goats, hemp, and tobacco. Additionally, soft red winter, hard red winter, and white wheat have been added, while the ethanol industry and contract poultry producers continue to be excluded. The enrollment period will run between September 21 and December 11. More information can be found here.

The USDA released the latest statistics on the Coronavirus Food Assistance Program (CFAP). As of August 3, the department has paid out $9.9 billion in payments and approved 621,919 applications.

Industry Update– The Center for Budget and Policy Priorities (CBPP) issued a statement urging lawmakers to extend the Pandemic EBT (P-EBT) program in order to continually assist families during the COVID-19 pandemic. The program allowed families to buy groceries to replace free or reduced-price meals provided by schools during the closure of schools last academic year. The center said the inaction of Congress has ‘stymied P-EBT’s extension and other federal supports that would mitigate hardship.’ In their statement, the CBPP urged for extension of other programs including the Supplemental Nutrition Assistance Program (SNAP), unemployment benefits, and Housing Choice Vouchers.

Big Picture Outlook

Natural Disasters Rage Across Nation– Natural disasters are continuing to take a toll on different parts of the country, including on the agricultural sector. Within the last month, the derecho in Iowa wiped out nine percent of the corn crop. This year’s crop was forecast to be the second-largest in history, selling at $3.50 a bushel. The USDA reported that approximately 550,000 acres were wiped out because of this rare, high wind phenomenon. In the southeastern United States, it is estimated that Hurricane Laura caused approximately $1.6 billion in damageto crops and forests, more than Katrina and Rita combined back in 2005. The majority of that damage was to the Louisiana timber industry. Additionally, Hurricane Sally hit land on Wednesday morning with overall damage estimates to be around $8 billion to $10 billion.

Farmworkers in California working to harvest crops have complained there isn’t enough PPE to protect them from the heavy smoke of the California wildfires. So far 2.3 million acres have burned this year in California. Washington has lost approximately a half million acres. Oregon reported that 672,000 acres burned this week alone. Grape producers are worried their wine products will be smoke tainted because of the sweeping smoke-filled air. With all these natural disasters, producers have been reminded of the importance to insure their products. For guidance on how producers can receive aid and guidance from natural disasters, please visit here. Disaster assistance for Hurricane Laura can be found here.

Farm Payments Focus on Southern States– The Government Accountability Office (GAO) released a report regarding the USDA Market Facilitation Program’s use of funds for farmers impacted by unfair trade practices. The report found the Southern states had the highest per-acre payments with the highest per-farmer payments going to producers in Georgia, Alabama, Florida, Mississippi, and South Carolina. The USDA emphasized the bulk of the money went to Midwestern states, but those states have the highest number of producers. Senate Agriculture Committee Ranking Member Debbie Stabenow (D-MI) said “[Secretary Perdue] certainly put together a program that favored the crops in his state.” The GAO additionally reported the USDA doubled payment caps last year to $250,000 per farmer. The higher limits enabled an extra $519 million to go to the top 1.3 percent of recipients..

WTO Rules Against Administration– Last Tuesday, a panel made up of members of the World Trade Organization (WTO) ruled the United States violated international trade rules by imposing $200 billion worth of tariffs on Chinese goods back in 2018. Since March 2018, the U.S. has imposed tariffs on $400 billion in Chinese exports. The Trump administration has maintained the position that tariffs were necessary to curb China’s unfair trading practices and intellectual property theft, issues addressed in the Phase One trade agreement. U.S. Trade Representative Ambassador Robert Lighthizer said this finding confirms that the “WTO is completely inadequate to stop China’s harmful technology practices.” The U.S. has sixty days to appeal the decision. After which, China could ask the organization to adjudicate which has the potential to last for multiple years. President Trump has continued to iterate he wants an agreement that will benefit both countries, but that the WTO has let China “get away with murder.”

The Week Ahead

Tuesday, September 22
  • 2:30 p.m. (EST) The Senate Joint Economic Committee will hold a hearing to “Examine the Economic Impact of America’s Failure to Contain the Coronavirus.”
Wednesday, September 23
  • 10:00 a.m. (EST) The Senate Environment and Public Works will hold a hearing “To Examine the Endangered Species Act Amendments of 2020, Focusing on Modernizing the Endangered Species Act.”
Thursday, September 24
  • 10:00 a.m. (EST) The House Small Business Committee will hold a hearing to discuss the “Paycheck Protection Program: An Examination of Loan Forgiveness, SBA Legacy Systems, and Inaccurate Data.”
Friday, September 25
  • 9:30 a.m. (EST) The House Small Business Committee will hold hearing for “A Review of PPP Forgiveness.”
To see a full list of House and Senate Committee business, visit here.

A Quick Look Back

Contact the Team 

Feel free to contact Michael TorreyTara SmithCassandra KuballJessica KuneyBarbara PattersonPerry Harlow, or Brandon Barnett with any questions or comments.