Weekly Food & Agriculture Update 9.14
WEEKLY FOOD & AGRICULTURE UPDATE
September 14, 2020
- COVID-19 Updates
- Big Picture Outlook
- The Week Ahead
- MTA in Action
- A Quick Look Back
- Contact the Team
Legislative Update– Senate Democrats blocked the GOP coronavirus bill from advancing on Thursday. The slimmed down bill included an additional $20 billion dollars in additional aid to farmers and ranchers. Aside from agriculture, the bill also provided funding for testing and vaccines, a $300 federal unemployment boost, and another round of the Paycheck Protection Program (PPP) to assist small businesses. The bill was met with significant criticism from Congressional Democrats as the bill does not contain funding for nutrition programs, the Census, rental assistance, and other areas covered in the House’s $3 trillion bill. While the bill wasn’t expected to pass from the start, some GOP Senators are pessimistic that a deal will even be reached before the November election. Senate Appropriations Chairman Richard Shelby (R-AL) said, “unless something really broke through, that’s not going to happen.” In response, President Trump said he is considering using $300 billion in unused coronavirus relief funds to send a second stimulus check to Americans, but noted he would rather have Congress sign off on a deal.
Federal Update- The USDA released the latest statistics on the Coronavirus Food Assistant Program (CFAP). As of August 3, the department has paid out $9.4 billion in payments and approved 576,379 applications. Department of Agriculture Secretary Sonny Perdue announced farmers will receive their remaining twenty percent of CFAP payments. This percentage amount was initially withheld from all recipients contingent on how much money was left available in the program. The Secretary said the $14 billion remaining as part of the CARES Act will be issued shortly after Labor Day and will compensate producers for any losses they had from April 15 through the end of 2020.
According to the USDA’s survey “Household Food Security in the United States in 2019”, 10.5 percent of U.S. households, approximating 13.7 million people, were food insecure in 2019, down from 2011 when the level was 14.9 percent. These numbers do not take into account the COVID-19 pandemic, as the Supplemental Nutrition Assistance Program added an additional six million people to the program. They also don’t take into account individuals using food banks and other programs. The statistics for 2020 food insecurity won’t be released for another year. Mississippi was found to have the highest level of food insecurity, while New Hampshire had the lowest.
According to the monthly report released by the Food and Agriculture Organization (FAO) of the United Nations, global food prices rose for a third straight month in August, reaching the highest levels since February. Although there are no major food shortages, farms have struggled to keep up with demand due to upended supply chains and differing consumer preferences, according to experts. Additionally, many countries are experiencing varying levels of food price inflation due to governmental measures taken to control COVID-19, even though global food prices have remained generally stable.
Industry Update– The Food and Agriculture Policy Research Institute (FAPRI) at the University of Missouri released a study finding farm income will significantly decline in 2021 if no new government programs are made available for farmers. This stems from the fact that record government payments to farmers, largely tied to COVID-19 relief efforts and other ad hoc assistance, were key in supporting farm income in 2020. The report claims that the discontinuation of such programs would result in government payments falling by fifty percent, which would lead to a $16 billion reduction in net farm income in 2021.
Big Picture Outlook
Report Warns of Environmental Impacts– A study by the Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee at the U.S. Commodity Futures Trading Commission (CFTC) stated climate change could have many serious effects on the U.S. economy. The report said climate change will greatly impact agriculture by “reducing average yields and total crops…[and effect] the ecological systems and biodiversity that agricultural systems rely on.” The report ultimately proposed fifty-three recommendations to mitigate financial risks imposed by climate change, including reforming crop insurance to make it more “actuarially sound” as well as investing more money in drought resistant crops and water storage projects.
The report also states insurance and mortgage markets, pension funds, and financial institutions will all suffer as wildfires, storms, droughts, and floods cause these industries to allocate large quantities of relief money. Chairman of the CFTC, Heath Tarbert, acknowledged the risks of climate change but noted switching to a green economy could impose very similar interruptions. CFTC Commissioner Rostin Benham stated this report will help policymakers and stakeholders “begin the process of taking thought and intentional steps toward building a climate-resilient financial system.”
A full copy of the report can be found here.
Hurricane Laura Causes Food Needs– Louisiana has moved from one crisis to another with the onset of Hurricane Laura. Food banks in Louisiana have made a concentrated effort to serve the southwest portion of the state with trucks being loaded with food, emergency supplies, and other necessities as these have become unavailable by the natural disaster. Food manufacturers and volunteers have come out to help compile food for those who have lack access. Food drives will continue to be conducted to provide aid to those affected by the hurricane. At this time, Disaster Supplemental Nutrition Assistance Program (D-SNAP) benefits have been made available to Louisiana residents and registration is open.
China Purchases Record Amounts of Ag Products– China purchased 664,000 tons of soybeans on September 8, the largest daily total since July 22. The USDA also reported private exporters marked the sale of 10,600 tons of corn. Additionally in August, the country booked its largest-ever weekly purchase of U.S. beef and pork at 3,315 tons and 11,216, respectively. While these are promising actions, showcasing China is working to fulfill its commitments under the Phase One trade deal, the country has purchased less than twenty percent of the agreed $36.5 billion in agricultural products for the 2020-2021 marketing year. However, Chinese imports of soybeans tend to increase in the fourth quarter, after the fall harvest concludes.
The Week Ahead
Wednesday, September 16
- 9:45 a.m. (EST) The Senate Commerce, Science, and Transportation Committee will hold a business meeting to consider various legislative measures and nominations. A full list of what is being considered can be found here.
- 10:00 a.m. (EST) The House Environment and Climate Change Subcommittee will hold a hearing regarding “Building a 100 Percent Clean Economy: Opportunities for an Equitable, Low-Carbon Recovery.”
- 10:00 a.m. (EST) The Senate Environment and Public Works Committee will hold a hearing to “Examine the Navigable Waters Protection Rule under the Clean Water Act, Focusing on the Stakeholder Reaction.”
Thursday, September 17
- 9:30 a.m. (EST) The United States International Trade Commission will hold a hearing to discuss “Raspberries for Processing: Conditions of Competition Between U.S. and Foreign Suppliers, with a Focus on Washington State.”
MTA Welcomes Brandon Barnett
Michael Torrey Associates is pleased to welcome Brandon Barnett as a policy coordinator. A Florida native, Barnett comes to MTA from an internship with Cornerstone Government Affairs. Prior to his internship, Barnett worked as a Compliance Associate for StoneX. Barnett earned his bachelor’s degree in Plant Science from the University of Florida.
A Quick Look Back
“Pandemic Results in Record Farm-to-Retail Price Spreads in Beef and Pork” American Farm Bureau Federation
“COVID Benefits Agriculture Trade: WTO” The Western Producer
“Food Banks: USDA Program Helped But Better Ways to Meet Need” Associated Press
“7 Ways the Pandemic Has Changed How We Shop for Food” The New York Times
“No Payoff: Summer Without Fairs Leaves Farm Kids Heartbroken” Associated Press
“Germany Confirms 1st Case of Swine Fever On Its Territory” Associated Press
Contact the Team