It’s a bad one-two punch for the America farmer.
In Wednesday’s Newsmaker, we heard from experts discussing the impact that logistics problems and caps on coronavirus aid payments are having on the agriculture industry.
As the coronavirus pandemic spreads across the U.S., schools, restaurants and hotels canceled contracts, meaning millions of dollars’ worth of American Ag products with no destination.
And locations that could have used those commodities, could not receive them, because of a variety of logistical problems, and challenges in changing transportation schedules.
Because of that, milk has been dumped, beans have been turned over and vegetables have been left to rot.
April Clayton with the Washington Farm Bureau noted the time of year for this turmoil makes it even more challenging on the American farmer.
“Right now, the grocery stores are kind of flooded with a lot of food from other countries, so what really needs to happen, is the America consumer needs to go to the grocery store and demand that we see more America products being placed in there. Because this is going to be a hardship for the American farmer.”
Clayton says logistics is not the only challenge right now.
“And it’s really concerning that we’re seeing grocery stores put a limit on how many gallons of milk you can buy, when literally farmers all across the U.S. are being forced to dump their milk. Because when you milk a cow it can only stay on your farm for 24 hours before you have to dump it. There is not enough truckers to go collect the milk, or enough plants to process it.”
Clayton noted in case the lost product wasn’t enough, the Ag community is looking at potential labor shortages as the year continues. This is why the CARES Act has become such an important piece for the agriculture industry.
Members of Congress or being asked to up the payment limits for the $16 billion in CARES Act CFAP money for farmers across the nation.
The current cap is $125,000 per commodity or $250,000 per entity. University of Illinois policy specialist Jonathan Coppess says the limits are a problem for some high-value ag products.
“I think we are going to run into some challenges around the livestock assistance and the specialty crop assistance. Particularly, when you think about the size of some of those operations and the specialty crops out in California. You have big, high-value crops.”
The payment limits now in place were set up for row crop commodities like corn, wheat, soybeans, cotton, and rice. The 2019 MFP payment limits were higher, but have been dealt with already says Coppess. The livestock producers and speciality growers present a wholly different challenge.
USDA, through the CARES Act, will provide $16 billion in direct payments to farmers and ranchers including:
- $5.1 billion for cattle
- $2.9 billion for dairy
- $1.6 billion for hogs
- $3.9 billion for row crop producers
- $2.1 billion for specialty crops producers