Projected $5.1 billion for cattle producers, $2.9 billion for dairy and $1.6 billion for hog producers in COVID-19 aid package.

Jacqui Fatka, Policy editor

April 20, 2020

3 Min Read
FDS bales of hay and dollar bills in field_FDS_Lior2_iStock_Getty Images-1540x800.jpg
MORE MONEY HEADED TO FARMERS: USDA announced millions more of pandemic assistance for farmers, including targeted funds for biofuel and livestock producers.iStock

The $19 billion Coronavirus Food Assistance Program (CFAP) to support farmers and ranchers during the COVID-19 pandemic, was announced Friday night and includes a significant share of the funds for livestock producers who have been hit especially hard.

The total aid package includes $16 billion in direct payments for farmers and ranchers, funded using the $9.5 billion emergency program included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and $6.5 billion in Credit Commodity Corporation (CCC) funding. It also includes $3 billion in purchases of agriculture products, including meat, dairy and produce to support producers and provide food to those in need. USDA will work with local food and regional distributors to deliver food to food banks, as well as community and faith-based organizations to provide food to those in need. 

Sen. John Hoeven, (R., N.D.) chairman of the Senate Agriculture Appropriations Committee, said in a statement that the $16 billion in direct producer assistance would be targeted accordingly:

• $9.6 billion for the livestock industry

•  $5.1 billion for cattle

•  $2.9 billion for dairy

• $1.6 billion for hogs

• $3.9 billion for row crop producers

• $2.1 billion for specialty crops producers

• $500 million for others crops

According to Hoeven, producers will receive a single payment determined using two calculations. Price losses that occurred Jan. 1 through April 15, 2020. Producers will be compensated for 85% of price loss during that period. The second part of the payment would be for expected losses from April 15 through the next two quarters and will cover 30% of expected losses.

The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. Qualified commodities must have experienced a 5% price decrease between January and April. 

USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June. 

As chairman of the Senate Agriculture Appropriations Committee, Hoeven secured nearly resources in agriculture assistance under the CARES Act. The programs announced today are made available using $9.5 billion in emergency funding in the CARES Act, as well as USDA’s existing CCC funding and current Section 32 authority. Additionally, Hoeven secured a $14 billion replenishment of CCC, which will be available in July to assist farmers and ranchers under the CARES Act.   

An April 14 economic analysis by the University of Missouri’s Food & Agricultural Policy Research Institute (FAPRI) is projecting an $11.85 billion loss in revenue for the crops sector and an additional $20.24 billion reduction in receipts for all livestock sectors combined. 

A study commissioned by the National Cattlemen’s Beef Assn. (NCBA), estimated that cow-calf producers stand to lose $8.1 billion as a result of the COVID-19 crisis, while the stocker/backgrounder sector losses will reach $2.5 billion and feedlot losses will total $3.0 billion as a result of the virus that is ravaging the American economy. Total industry losses are expected to reach $13.6 billion.

Dr. Dermot Hayes, an economist with Iowa State University, and Dr. Steve Meyer, a pork industry economist with Kerns & Associates, estimate that hog farmers will lose nearly $37 per hog, or almost $5 billion collectively, for each hog marketed for the rest of the year. 

Dairy farmers are dumping as much as 8% of their milk, according to the Dairy Farmers of America cooperative. As the crisis wears on, the dairy industry expects to lose $5-$10 billion in sales for the remainder of the year, stated Michael Dykes, D.V.M., President and CEO of the International Dairy Foods Association.


About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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