Farmers’ sentiment rebounds from low, but worries persist
Large American farms are more confident of weathering the coronarvirus pandemic but nearly two-thirds of them say Congress should provide more assistance beyond the $16 billion already earmarked for agriculture, said Purdue University on Tuesday. Some 27 percent of producers surveyed for Purdue’s monthly Ag Economy Barometer said they were “very worried” about the impact of the virus on their farm’s profitability.
“Farmers are still pretty concerned about the impact of coronavirus on productivity but less so than they were earlier this spring,” said Jim Mintert, one of the Purdue economists who oversee the barometer. In March, during the early days of the pandemic, 40 percent described themselves as very worried.
In the Purdue poll, 64 percent of farmers and ranchers said “it will be necessary for the president and Congress to pass another bill to provide more economic assistance to farmers,” little changed from the preceding month, when 67 percent said more aid should be appropriated. The USDA began coronavirus payments in early June. As of this week, one-third of the $16 billion has been disbursed. The USDA has access to an additional $14 billion once it submits to Congress a financial statement about the Commodity Credit Corp (CCC), the USDA conduit for farm subsidies.
With Congress considering a new coronavirus relief bill in late July, the largest U.S. farm group, the American Farm Bureau Federation, wants to more than double the spending power of the CCC, to $68 billion from the current $30 billion, before it must ask Congress for more money. The Trump administration is on track to spend $39 billion on stopgap trade-war and coronavirus relief to agriculture in three years. The National Pork Producers Council is among farm groups pressing for additional farm aid in the new coronavirus bill. The ethanol industry also hopes for aid.
“Let’s keep the ($30 billion CCC) cap and let Congress debate whether to raise the cap during an emergency rather than give USDA blanket authority to create large payment programs whenever politically expedient,” said Joe Glauber, former USDA chief economist, on social media. Glauber said the CCC rarely hits its spending limit.
Sixty percent of operators told Purdue that the coronavirus payments “somewhat” or “completely” relieved their concerns about the impact of Covid-19 on farm income.
Asked about their No. 1 concern during the pandemic, 42 percent said “market access” and 37 percent said “financial.” Market prices for commodities such as corn, cotton, soybeans, dairy, pork and beef plummeted as the coronavirus spread in late winter. Hog, cattle and poultry packing plants slowed or temporarily stopped production because of outbreaks among workers.
Four out of 10 participants in the Purdue survey said they conduct more business online because of the coronavirus and slightly more than half of respondents said they were less likely to go to farm shows, field days or educational events because of Covid-19.
The Ag Barometer, a gauge of farmer confidence, has a reading of 117 at present. It fell to 96 in April, its lowest reading since October 2016, as the coronavirus hammered the US economy.
For the monthly barometer, Purdue surveys by telephone 400 farmers and ranchers who produce at least $500,000 a year in agricultural products. The survey has a margin of error of plus or minus 5 percent.