More Stimulus on the Way

Following much anticipated negotiations, Congress passed a $900 billion COVID-19 stimulus package. Included in the package is much-needed financial relief for agricultural producers as well as additional financial resources for agricultural research and farmer stress assistance programs.
Of the $900 billion in the package, $13 billion was allocated to agricultural programs, representing approximately 1.4% of total spending in the bill. Of the $13 billion, $11.2 billion is allocated to the Office of the Agriculture Secretary, approximately $870 million is allocated for a supplemental Dairy Margin Coverage program as well as a $400 million dairy donation program.

Row crop producers will receive $20 per acre payments on corn and soybean acres — amounting to $1.8 billion for corn acres and $1.6 billion for soybean acres.

Many farmers and ranchers who were previously left out of the first round of program aid can now receive assistance, including ranchers who were forced to euthanize livestock early in the pandemic. USDA would be authorized to compensate producers for up to 80 percent of their livestock and poultry values that were lost when animals were culled because of backups at processing facilities.

The American Farm Bureau Federation was instrumental in making sure agriculture was included in the stimulus package.

Under the CARES Act, to be eligible for assistance, the farmer had to directly own the commodity. This worked well for cattle and hog producers, but not for broiler farmers, who typically grow birds under contract and don’t own the birds. These producers saw their income significantly reduced as many of their barns (whose construction is not covered under contracts) remained empty due to supply chain disruptions earlier in the pandemic. The new bill addresses losses faced by many in the poultry industry (and other livestock sectors as well) by providing $1 billion for contract growers of livestock and poultry.

For the dairy sector, the bill also provides cash flow assistance to small and midsized dairies by establishing supplemental dairy margin coverage based on 75 percent of the difference between recent actual production (based on 2019 marketings) and the established production history currently used by the Dairy Margin Coverage (DMC) program. Payments under this supplemental program would be based on the additional 2019 production and the elected DMC coverage level. Many small and midsized dairies have grown their operations since their production history was established and locked in in previous farm bills. This legislation would allow those operations to qualify for additional coverage for 75 percent of any increases in milk production up to 5 million pounds.

Biofuels (corn ethanol and biodiesel) are eligible for payments under the bill, but the USDA is not required to assist them.