With the recently announced plans by the USDA to provide funding aid to farmers and ranchers through the Coronavirus Food Assistance Program (CFAP), some groups are worried the aid may miss the mark.
National Cattlemen’s Beef Association (NCBA) sent a letter to the Secretary of Agriculture Sonny Perdue today, thanking him for his tireless work to support America’s farmers and ranchers whose livelihoods have been threatened by the COVID-19 pandemic. Last week, President Trump and the USDA announced they will provide $19 billion through CFAP to aid farmers and ranchers with $5.1 billion directly going to the cattle industry.
NCBA knows the cattle industry has and will suffer significant losses due to COVID-19, and CFAP has the potential to be a critical lifeline for America’s cattle producers whose family businesses have been upended by the ongoing pandemic. NCBA Vice President of Government Affairs Ethan Lane said “While we are extremely grateful to Congress, USDA and the Trump Administration for their work to keep the beef supply chain moving and deliver aid to our producers, we are concerned that the distribution of CARES Act funds to cattle producers could miss the mark.”
As USDA works to finalize program details, NCBA cautioned the Department against any payment limitations or means-testing provisions that would arbitrarily restrict assistance under CFAP. While many details of the program have yet to be released, initial reports indicate CFAP will have a payment limit of $125,000 per commodity and $250,000 per producer.
Lane said “The low payment cap of $125,000 per commodity will prevent many operations, large and small, from receiving enough assistance to soften this blow. The proposed anticipated loss payment formula for cattle will also leave many producers, including a large percentage of the cow-calf sector, out in the cold.”
In March, NCBA commissioned a team of renowned agricultural economists, led by Dr. Derrell Peel of Oklahoma State University, to forecast cattle market losses attributable to COVID-19. That study, released on April 14th, estimated total industry losses at $13.6 billion. Further, the study found immediate losses by cattle industry segment broke down to $3.7 billion for cow-calf producers, $2.5 billion for stocker/backgrounders, and $3 billion for feeders.
NCBA is aware that CFAP will only cover a percentage of both the actual and projected losses for U.S. cattle producers, but said the proposed payment limitations will drastically restrict that relief. In an example based on their analysis, the $125,000 per-commodity cap would limit payments for cow-calf operations with 505 head or more of cattle, stocker/backgrounder operations with a 781 head inventory and feed-yards with 606 head of feeder cattle.
Further, prescriptive formulas that limit compensation for losses incurred after April 15th to 30%, as has been attributed to this program, would result in many producers deriving almost no real relief from these funds. Put simply, this crisis continues to escalate, as do the financial impacts to cattle producers across all sectors and regions.
The letter wrapped with a thank you and a statement that included, “we must be adequately equipped to weather all short-term losses as we await a resolution to the COVID-19 crisis.”
Northern Ag Network -2020