Q: What’s in the CARES Act to help farmers?
A: The coronavirus pandemic is hitting American agriculture especially hard. As millions of Americans stay home to help stop the spread of the virus, the drop in demand for fuel and food service sales is disrupting biofuels and farm commodity markets. As a leading producer of biofuels, hogs, corn and soybeans, the ripple effect is causing substantial financial hardship and uncertainty among Iowa livestock producers and grain farmers. At least 10 Iowa ethanol plants have idled production and two biodiesel facilities have closed indefinitely. Iowa’s production capacity essentially has been cut in half. That means grain farmers in Iowa have lost access to a key market that buys nearly half of the state’s corn harvest and adds 13 percent to the cash price for a bushel of soybeans. The price of corn has fallen about 50 cents per bushel since the beginning of February, for example. During negotiations on the Coronavirus Aid, Relief, and Economic Security (CARES) Act, I worked to secure relief for American agriculture. As one of two family farmers in the U.S. Senate, my advocacy for our nation’s food producers along the supply chain is as important ever. The pandemic underscores two guiding principles that steer my work on farm policy. First, food security is national security. Second, food doesn’t grow on the grocery store shelf. It comes from farms. That’s why I worked to include $23.5 billion in the CARES Act to send emergency, temporary relief to farm country to help weather the fall-out caused by the pandemic. It sets aside $9.5 billion for the USDA to directly support farmers and ranchers. Here, the USDA ought to follow my general rule of thumb when it comes to federal farm payments and target scarce resources to family farming operations, not mega-producers. The CARES Act also replenishes the Commodity Credit Corporation with $14 billion. I’ve called upon USDA Secretary Sonny Perdue to use some of these funds to help support the biofuels industry, including resources for higher blends infrastructure at filling stations and to leverage the purchasing power of the federal government to buy excess farm commodities and replenish food pantries and nutrition programs across the nation.
Q: What are your concerns about disruptions in the food supply chain?
A: The pandemic has exacerbated low commodity prices in the ongoing six-year downturn in the farm economy. Nationwide school and business closures have suppressed demand, forcing unthinkable scenarios where dairy farmers are dumping milk, fruit and vegetable crops are rotting in fields and hog farmers face the untenable prospect that it costs more to raise a pig than the return on its market value. What’s more, the public health emergency has led to closures of meat processing plants to protect the health and safety of the workforce. This triggers a broad range of issues that creates even more uncertainty for farmers, affecting prices and management decisions, the capacity to process market-ready livestock, and cold storage shortages, all with significant implications for American consumers. The pandemic is delivering a reality check about the U.S. food supply chain presented by captive supplies and consolidation in production and distribution systems. For example, consumers stocking up on groceries noticed high beef prices on the shelf and yet live cattle prices plummeted as values for meatpackers climbed. These margins are raising eyebrows, especially when the four largest meatpacking companies control roughly 80 percent of beef processing in the United States. For more than two decades, I’ve worked to curb anticompetitive production arrangements that harm independent producers and family farmers. I’ve called for strong enforcement of the nation’s anti-trust laws and collaboration among federal agencies, including the USDA, when scrutinizing mergers and acquisitions among beef, pork and poultry processors, seed businesses and agrochemical companies. Earlier this month, I asked the Departments of Justice and Agriculture to investigate potential market manipulation and other illegal activity by meatpacking companies in the cattle industry. I’ve also cosponsored bipartisan legislation to secure accountability and certainty for beef producers. The Securing All Livestock Equitably (SALE) Act would fix situations that put livestock producers on the hook for dealer defaults.
When the dust settles, the economy re-opens and the coronavirus pandemic recedes into the rearview mirror, policymakers, lawmakers and industry leaders will have lessons to learn from this unprecedented moment in our history. Only two percent of the U.S. population grows the food that feeds America. The safety and viability of America’s food chain depends on a competitive marketplace and regulatory regime that can manage market disruptions and curb market distortions so that America’s farmers and food producers can thrive and continue providing the most abundant, wholesome, affordable food supply in the world. As always, the livelihoods and way of life for America’s farm families will have a voice at the table as long as I’m in the U.S. Senate.
Author: Charles Grassley
Chuck Grassley of New Hartford has represented Iowa in the United States Senate since 1980.
