Since every sector in the ag industry is hurting right now, producer and ag groups are asking the USDA to remove the cap set on the Coronavirus Food Assistance Program.
For example, in the dairy sector a new economic analysis projecting a 58 percent decline this year in net cash income for U.S. dairy farms due to coronavirus-related market disruptions. This further demonstrates the need to eliminate a proposed $125,000 payment cap in federal disaster assistance, according to Jim Mulhern, president and CEO of the National Milk Producers Federation.
As highlighted at the Texas Ag Forum yesterday, dairy losses will outpace those for cattle, cotton, and feed grains and oil seeds, with catastrophic losses for all producers. For example, a dairy of 1,000 cows in Wisconsin will see net cash income decline by $500,000, while larger operations in Texas and Idaho could see losses in the $1.2 million range, according to the analysis.
Average net cash income losses in dairy would be $345,000. The USDA assistance package for agriculture announced April 17 caps payments to producers at $125,000 per commodity. Many dairies only produce milk.
“Analysis shows what the dairy community already knows — the COVID-19 crisis presents grave danger for all dairies, from small operations to the producers whose milk nourishes the majority of U.S. consumers and keep supply chains running,” Mulhern said. “We have raised our concerns over payment limits with both President Trump and USDA, and with the Administration making important decisions in how it allocates aid, it’s important to highlight the very real impacts that lower support levels will have on dairy producers and the communities they serve.”
NMPF is supporting efforts by lawmakers and allied organizations to increase aid to producers and estimate losses and compensation in ways that reflect the true scale of damage to the farm economy. Last week, a bipartisan group of 126 House members and 28 Senators sent letters to the administration urging that this problem be solved.
The letters were spearheaded by Senators Jerry Moran (R-KS) and Dianne Feinstein (D-CA) and Representatives Jimmy Panetta (D-CA), Mike Simpson (R-ID), Jim Costa (D-CA), Dan Newhouse (R-WA), Henry Cuellar (D-TX), Fred Upton (R-MI), Xochitl Torres Small (D-NM), and Roger Marshall (R-KS). The House letter is available here, and the Senate letter is available here. NMPF’s letter to President Trump is here.
Last week, the National Cattlemen’s Beef Association also sent a letter to the U.S. Department of Agriculture urging against payment limitations for cattle producers under the Coronavirus Food Assistance Program.
“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. We do not believe this was USDA’s intent, but recognize we are in uncharted territory for the cattle industry with this type of assistance. As such, we feel it is critical to continue providing feedback from our producers across the country to USDA.