Farmers faced higher expenses and earned less money from their crops and livestock than initially expected in 2020, due to market disruptions caused by the pandemic, said a USDA Covid-19 working paper. By many standards, such as debt-to-asset ratio, the financial strength of the sector softened in 2020, despite $45.7 billion in federal subsidies — the largest ever — said USDA economists.
In the six weeks since the USDA launched the program, farmers have received $4 billion from the Emergency Relief Program as compensation for losses from wildfire, drought, hurricanes, winter storms, and other natural disasters, said Agriculture Secretary Tom Vilsack on Wednesday.
The government paid a record $41.6 billion in a variety of subsidies to farmers in 2020, double the amount they received in 2018, when the Trump-era cash gusher began flowing, said the Environmental Working Group on Wednesday.
As bird flu losses topped 35 million fowl, Agriculture Secretary Tom Vilsack said on Thursday that the USDA has paid about $146 million in indemnities to poultry owners, with an additional $263 million available. “That’s about half of where we were in 2014-2015 with the last outbreak,” he said.
The USDA sent $23 billion in trade war payments to more than a half million farming operations, with the lion's share of the aid going to row-crop producers, said the Government Accountability Office on Thursday. Historically underserved farmers received less than 4 percent of the money.
Farmers have received $4.8 billion in long-promised payments of $20 an acre on crops that range from corn, soybeans, and wheat to sorghum and sugar beets, said USDA data on Monday. It was the largest disbursement of coronavirus relief funds since the Biden administration took office.
The food stamp program will cost $145 billion this year, more than double its pre-pandemic total, due to expansion to combat the pandemic, estimated the CBO in updating its budget outlook. Mandatory agricultural spending was forecast at $48 billion this year, an increase of $17 billion from 2020.
Following through on pledges of more equitable aid to agriculture, the Biden administration has created a new Pandemic Assistance for Producers program to distribute more than $12 billion in cash. It said on Wednesday that it wants to "reach a broader set of producers" than in previous Covid-19 aid programs.
The House Agriculture Committee approved a landmark $4 billion program of debt relief for socially disadvantaged farmers on Wednesday despite Republican objections that the aid was an unconstitutional form of reverse discrimination. Chairman David Scott, a Georgia Democrat, said minority farmers deserved the help because they had been overlooked in the mammoth trade war and coronavirus relief programs that began in 2018.
As part of a government-wide regulatory freeze, the Biden administration has suspended payments while it reviews the $3 billion in pandemic aid to agricultural producers that was announced in the final week of the Trump administration, said the USDA on Thursday.
Row crop farmers would see payments of $20 an acre and livestock producers would be compensated for animals culled during the pandemic under the $900 billion coronavirus relief bill that was unexpectedly challenged by President Trump on Tuesday, a day after Congress passed it. The $13 billion bill includes a $400 million dairy donation program, aid to contract poultry growers, and assistance for textile mills and, potentially, ethanol refineries.
The margin for error is shrinking in the farm sector as financial stress, measured by rising debt loads and the erosion of working capital, is rising, said Todd Van Hoose, chief executive of the Farm Credit Council on Wednesday.
During a re-election rally in rural Wisconsin on Thursday, President Trump announced an additional $13 billion in coronavirus relief for U.S. farmers and ranchers, more than doubling assistance to the sector. The money will be available beginning next week, said the president.
U.S. farm income, buoyed by record-setting farm subsidies this year, will sink in the new year with the disappearance of government payments to buffer the effects of the trade war and the coronavirus pandemic on agriculture, said the FAPRI think tank on Thursday. Farm groups and their allies in Congress are likely to seek billions of dollars in new federal assistance, said analysts.
The Trump administration is showering U.S. agriculture with the largest farm supports ever, an estimated $37 billion, chiefly through stopgap programs to mitigate the impact of the pandemic, said the Agriculture Department on Wednesday. As a result, farm income in 2020 would be the highest in seven years.
The USDA aims to release a new version of its coronavirus relief program for farmers and ranchers in the next couple of weeks, said Agriculture Secretary Sonny Perdue on Wednesday, with at least $14 billion available. President Trump has suggested the new program will boost coronavirus spending on producers to $34 billion this year — a record for farm subsidies.
Federal payments to farmers are forecast at a record $32 billion this year, with additional outlays all but certain due to the pandemic and economic recession, said two farm policy experts in gauging potential action in the near term.
In its largest payout since the program began, the USDA sent $2 billion in coronavirus aid to farmers and ranchers last week, most of it going to producers who had received a prorated payment earlier this summer.