The federal government is sending up to $14 billion in additional aid to farmers struggling with low prices, lost markets and other supply chain disruptions tied to the global pandemic. USDA recently announced a new round of help from the Commodity Food Assistance Program. Sign-up for CFAP 2 will run through Dec. 11.
“America’s agriculture communities are resilient but still face many challenges due to the COVID-19 pandemic,” says U.S. Secretary of Agriculture Sonny Perdue.
This is the second round of CFAP assistance the Trump administration is sending to farmers. The first round, $19 billion, was announced in April as the coronavirus upset the nation’s food supply chain. “The pandemic continues to create significant market and trade disruptions, and this poses real challenges for farmers,” notes Iowa Secretary of Agriculture Mike Naig. “The ag economy will rebound, but it will take time.”
Farmers saw market demand disappear during the initial shockwave of the pandemic. Even though concerns over food supplies have now subsided, economic hardships are still taking their toll on farmers nationwide. Farm groups are projecting large losses tied to COVID-19 market interference.
Farmers’ losses in billions
The National Pork Producers Council projects U.S. hog farmers will lose $5 billion this year because of the coronavirus, and cattle producers say their losses will hit $13.6 billion. The National Corn Growers Association projects a $59-per-acre average revenue decline for the 2019 corn crop and an $89-per-acre decline for 2020, compared to pre-COVID-19 projections. If realized, the 2020 crop year revenue would be the lowest corn revenue since 2006. Residual impacts from COVID-19 on prices are very likely to persist into 2021 and possibly beyond.
“It’s been a tough year for agriculture, and there’s still a lot of uncertainty across the Corn Belt,” says NCGA President Kevin Ross, an Iowa farmer. “We’re doing all we can to get back on solid ground, but we can’t do it alone. CFAP 2 is welcome and a positive step forward.”
Payments are capped at $250,000 per farmer or ag entity, a limit several groups and lawmakers have complained can easily be skirted, resulting in payments that exceed $1 million. Some groups have criticized CFAP for aiding mostly big farmers, since the first round of CFAP began assisting farmers in January. Perdue says USDA has fine-tuned the program, and CFAP 2 will avoid this problem.
Applying for assistance
The second round aims to assist a wide range of growers, including corn, soybean and other row crops; beef, pork and lamb; specialty plant producers; and more. USDA says payments will be provided based on price triggers, flat rates or sales. Or if it’s higher, farmers can use a formula based on crop insurance yield guarantees. A complete list of eligible commodities, payment rates and calculations can be found at farmers.gov/cfap.
“The Iowa Corn Growers Association has continually urged Secretary Perdue and the Trump administration to provide additional relief for our farmers, including CFAP payments,” says ICGA President Carl Jardon. “We now thank them for providing aid to corn farmers who have experienced their worst year of market demand loss on top of extreme weather conditions.”
“Many sectors of the economy have struggled through the global pandemic and ag is no exception,” says Iowa Farm Bureau President Craig Hill. “Many farm families are feeling the hardship and fighting to keep their farms going. Many farmers were left out of the initial round of CFAP aid. This second round of assistance is welcome news.
“While we don’t know when the pandemic will subside, the impacts on agriculture are far reaching, from changing consumer buying habits to trade and market disruption and uncertainty. Farmers saw prices and demand plummet amid the supply chain breakdown early in the pandemic. And although there has been a rebound, the economic hardship is taking its toll on farmers. This USDA assistance will help Iowa farmers to stay afloat and continue to farm and produce the food we all rely on.”
In Iowa in the first round of CFAP, the largest payments have gone to corn producers, $349.2 million; cattle producers, $290.1 million; hog producers, $179.5 million; soybean growers, $85.4 million; and milk producers, $52.5 million, according to USDA data as of mid-September.