R.F.D. NEWS & VIEWS: Economist breaks down $19 billion ag package

By Tim Alexander for Chronicle Media

Illinois farmer Don Guinnip has been recognized as one of Illinois’ top soybean producers. The January-February soybean crush provided hope for an Illinois agriculture industry reeling from the repercussions of the COVID-19 pandemic. (Illinois Corn Facebook photo)

Financial relief is once again coming to farmers via government aid, this time in the form of a $19 billion coronavirus-related economic aid package announced by USDA Director Sonny Perdue last week. We’ll tell you how that money breaks down, and who will get what. In other top agriculture news, research continues into the effects — if any — of COVID-19 on U.S. food animals, and there is good news — for now — regarding the soybean crush. Please read on for more info on these and other topics …

Economist breaks down $19 billion ag package

URBANA — The American Farm Bureau Federation led the chorus of approval you heard from U.S. farmers last week, after Agriculture Secretary Sonny Perdue announced a $19 billion economic aid package for farmers and ranchers whose livelihoods are being affected by the novel coronavirus, or COVID-19, pandemic. The package includes $16 billion in “direct payments” to producers and another $3 billion to fund USDA purchases of meat, dairy, fruit and vegetable products from farmers who have lost key markets due to the virus.

“The coronavirus pandemic forced the closing of restaurants, schools and college cafeterias, causing commodity prices to fall off a cliff and serious disruptions to food supply chains,” said AFBF President Zippy Duvall. “This $16 billion in aid will help keep food on Americans’ tables by providing a lifeline to farm families that were already hit by trade wars and severe weather. The plan to purchase $3 billion in meat, dairy products, fruits and vegetables will help to stabilize markets and keep farms afloat so they can go about the business of feeding America.”

Though Perdue has not yet indicated (as of press time) exactly how the $16 billion in direct aid will be distributed to farmers, a webinar hosted by the University of Illinois farmdoc team on April 24 offered speculation on what sectors of agriculture might benefit most. U of I agricultural economist Nick Paulson, along with Brooke Appleton, vice president of public policy for the National Corn Growers Association, based projections on how much money each sector stands to lose from COVID-19 supply disruptions, with livestock topping the list of most affected. Appleton predicted that of the $16 billion, the livestock sector would receive around $9.6 billion, while the row crop sector would receive a payment of $3.9 billion. Specialty crops would receive around $2.1 billion, and approximately $500 million would be available to producers of other crops.

In addition, USDA has up to $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks, according to a USDA news release.


Report: No links between COVID-19, pigs

SPRINGFIELD — The latest research fails to show any link between COVID-19 and pigs, says National Pork Board director of producer and public health Dr. Heather Fowler. “First, people should know that while the SARS-CoV-2 virus that causes COVID-19 is new, there is no evidence to suggest that pigs can contract it,” said Fowler. Chickens, likewise, are not susceptible to the novel coronavirus, studies are showing.

Pig farmers, always proactive when it comes to contamination prevention, have moved quickly to implement steps to keep animals and employees safe and healthy, according to the NPB veterinarian, including restricting farm visitors and engaging in extra sanitation measures. Some are working closely with their veterinarians and taking steps such as adjusting barn ventilation systems to reduce exposure. In addition, employees with signs of respiratory illnesses are being kept away from pig housing units.

“The pandemic has shown the importance of a healthful, safe food supply chain, and pig farmers are proud to play an important role in their communities and in keeping stores well-stocked as people eat at home,” noted Dr. Brett Kaysen, NPB vice president of sustainability. (NPB, IPPA news release)


Soybean crush picks up momentum

URBANA — A bright spot amidst the troubling news associated with the COVID-19 pandemic can be found in the pace of the U.S. soybean crush. While exports continue to lag, crush picked up substantially in February and March. The increase in crush totals coincided with the drop in soybean prices that began in late January, reported Todd Hubbs, agricultural economist for the University of Illinois Department of ACES. However, further expansion of the crush is unlikely, he predicted, thanks to the pandemic.

“The USDA raised the crush forecast in April to 2.125 billion bushels, up 20 million bushels over the March forecast. Disruptions in meat supply chains, both foreign and domestic, may blunt further expansion in crush totals this marketing year due to lower than expected soybean meal use,” Hubbs said in the Department of ACES Weekly Outlook for April 20.

The March crush report level was placed at 181.4 million bushels, implying a USDA crush estimate report near 190 million bushels, Hubbs continued. This suggests that crush during the last five months of the MY must total 864 million bushels, 1.2 percent higher than the 2019 MY crush, to equal the USDA forecast of 2.125 billion bushels.


Opinion: Farmers likely to shun corn acreage

LENEXA, Kan. — Another adverse effect of the COVID-19 pandemic on agriculture is greatly reduced demand for ethanol. With many Americans idled at home, motor vehicle fuel usage has fallen substantially, and with it, demand for fuel additives like corn-based ethanol. With ethanol plants greatly scaling back production — or closing — and corn prices precariously close to $3 per bushel, market analysts such as Jerry Gulke of the Gulke Group are predicting that many farmers will rethink their corn acreage moving forward.

“Some people are switching a pivot from corn to alfalfa. Some are going into specialty crops, non-GMO or expanding organic production,” Gulke observed. “I just switched some more corn ground to bean ground. Why would I plant corn now when I know it is a negative result?”
Gulke advised farmers in his AgWeb.com column that “now is when being flexible and using futures and options can help you make good decisions quickly.” (Farm Journal/AgWeb)


Illinois Farm Fact:

Don Guinnip, a Marshall, Illinois farmer, has received a U.S. congressional citation in recognition of the high quality of his soybeans. Congratulations Don! (Illinois Soybean Association)