Livestock, Specialty Crop Growers Look to CARES Act Relief

Published online: Apr 07, 2020 News Mikkel Pates
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Source: Ag Week

The COVID-19 market trauma is hitting farmers across the board in North Dakota, and federal financial help can’t come fast enough.

U.S. Sen. John Hoeven, R-N.D., speaking from Bismarck, conducted an online agricultural roundtable with two top U.S. Department of Agriculture officials on April 3 to hear from several farm organization and commodity specific concerns involving the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and other federal issues. Meetings like this are typically done in person, but because of the physical distancing recommendations, it was via teleconference.

During the April 3 webinar, Hoeven, along with Ken Barbic, USDA assistant secretary in charge of congressional relations, and Robert Johansson, USDA chief economist, listened to a parade of concerns from beef, specialty crop and row crop groups.

Barbic said USDA is “thinking globally” across commodity categories and is working “quickly and aggressively” to get funding out. Johansson invited North Dakota producers and groups to provide real world examples of their economic hit — information he said that would remain confidential.

Hoeven said a $14 billion replenishment of USDA’s Commodity Credit Corporation finances will be an important help, provided within the $2.2 trillion CARES Act. Additionally within the CARES bill, about $9.5 billion of funding was approved to assist livestock, specialty crops and direct marketing industries as a result of lost business.

Watne noted that North Dakota grain farmers are largely captive to the BNSF Railway for shipping grain out of the state. He said farmers are penalized through “basis” penalties imposed by railroads, but Johansson, however, said data show that basis levels are not much different than they’ve been over the past 10 years.

Pete Hannebutt, director of public policy for the North Dakota Farm Bureau, said livestock producers are harmed by impacts to ethanol producers from reduced motor fuel demand. He said cattle feedlot operators have built their operations based on availability of distillers grains, a byproduct of ethanol production. He also urged attention to the availability of workers available through the H-2A seasonal agricultural worker program.

Livestock Lift

Julie Ellingson, executive vice president of the North Dakota Stockmen’s Association, said her group has assembled a 15-member committee to address concerns. She said the group chose aid based on inventory levels, as of a particular date — Feb. 21 — “a day when we saw a sharp market response to this crisis.”

  • “Equity” among various beef sectors — seedstock, stockers, feeder cattle, cow-calf and feedlot production. But relief would be delivered on inventory of three classes of cattle: cows, feeder cattle and fed cattle.

  • Newlyborn calves at 399 pounds or less would be counted with the mother cow.

  • The “one-time, per-head” payment would be $150 per head payments, which is not the full drop in value Feb. 21 to April 3. (North Dakota Agriculture Commissioner Doug Goehring, separately, had proposed a payment based on Jan. 15 cattle inventories, and suggested payments at different weights, but Hoeven urged the two proposals to unify.)

  • A $250,000 cap per producer would be established, regardless of the size of the operation.

  • Zero relief for packers. “The packing segment of the cattle industry has not suffered a loss due to the pandemic” and the group is “firmly opposed to any relief funding being distributed to this segment,” Ellingson said. Similarly, the Stockmen's Association wants zero relief for non-U.S. citizens, or anyone who “may feed or pasture here, for example,” but Ellingson couldn't say if that prohibition already exists in other areas of federal statute.

  • The system should allow amplified, quick distribution but should prevent people from “changing configurations” simply to fit the relief program.

Specialty Hit

Specialty crop groups who didn’t get payments in the Market Facilitation Program that in 2019 that were designed to counter tariff trade retaliation are now seeking equitable treatment under the CARES Act..

Northern Plains Potato Growers Association President Donavon Johnson of Grand Forks, N.D., said large plants making process fry products, typically from brown oblong russet potatoes — including french fries — are anticipating a need to cut contract acres for the 2020 crop, which some in the industry nationwide are saying could be down 10% to 20%. Those could include the Simplot or Cavendish plants in North Dakota but nothing for them has been announced.

In the Pacific Northwest, Johnson said changes in market conditions will mean some of the 2019 crop in storage may need to be dumped or diverted to other markets — fresh (tablestock), dehydrated, or cattle feed. He said the “fresh market was strong; now it’s dropped off the cliff.”

John Sandbakken, executive director of the National Sunflower Association, and Barry Coleman, executive director of the Northern Canola Growers Association, both based in Bismarck, urged the USDA officials to consider including their commodities in any future MFP payments because their crop values are so closely linked to the big crops of corn and soybeans. Coleman noted that the high-quality canola cooking oil values have suffered from the downturn in restaurant fortunes after the COVID-19 quarantines.

Blake Inman, a Berthold, N.D., farmer and chairman of the U.S. Durum Growers, said his commodity — used to make high-quality pasta products — has suffered because of reduced Italian imports of U.S. durum.

Shannon Berndt, executive director of the Northern Pulse Growers Association, said her industry has lost an estimated $500 million in value. She said the limited hours in food banks and other delivery methods have become a “bottleneck” for getting product to consumers.

Sugarbeet industry officials, including Tom Astrup, president of American Crystal Sugar Co., urged ongoing fairness in the importation of sugar from Mexico and other countries. He said Crystal on March 26 had received its share of disaster money from the difficult 2019 season and that a week later 75 percent of the payments were in the hands of producers.

Corn, Soy Issues

Randy Melvin, president of the North Dakota Corn Growers, and Nancy Johnson, executive director of the North Dakota Soybean Growers Association, both talked about the COVID-19 impacts on corn and bean markets. Corn demand going to ethanol plants, which generally are credited with adding 30 to 40 cents a bushel to the crop, has gone down.

In a separate issue, Melvin asked for updates on quality loss adjustments and information deadlines for relief for 2018 and 2019 weather disasters under the Wildfire and Hurricane Indemnity Program Plus, referred to as WHIP+.