Ranchers are feeling the effects of the coronavirus pandemic, and industry groups are pushing for additional aid for affected producers.
A study commissioned by National Cattlemen’s Beef Association (NCBA) and led by Derrell Peel, Oklahoma State University marketing specialist, estimated the potential COVID-19 impacts on the cattle industry. The purpose of the study was to help USDA decide how to allocate relief funds included in the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act to cattle producers.
The study was conducted using information available as of April 8. The report totaled an estimated loss of $13.6 billion for the entire beef cattle industry, with the cow-calf segment representing nearly 60 percent of the total impact, stocker cattle receiving around 18 percent of the impact, and the feedlot sector representing about 22 percent of impact.
The study determined cow-calf producers will feel the largest impact from the pandemic, with total segment losses amounting to $3.7 billion—$111.91 per head for each mature breeding animal. If no relief payments were provided, the loss could increase to an additional $135.24 per head, to total an additional impact of $4.45 billion in the next few years.
Stocker/backgrounding losses were estimated at $159.98 per head, for a total loss of $2.5 billion in 2020. The feeding sector was estimated to have losses of $3 billion, or $205.96 per head.
The full report is available at ncba.org.
“This study confirms that cattle producers have suffered massive economic damage as a result of the COVID-19 outbreak and those losses will continue to mount for years to come, driving many producers to the brink of collapse and beyond if relief funds aren’t made available soon,” said NCBA CEO Colin Woodall. “This study also clearly illustrates the fact that while the relief funds provided by Congress were a good first step, there remains a massive need for more funding to be allocated as soon as members of Congress reconvene.”
Woodall noted that relief funds were divided among multiple commodities, some of which already have government support programs in place.
“However, cattle producers have always maintained their independence from government programs, and most operate today without the safety net others enjoy,” an official NCBA statement said. Because of this, Woodall requested additional funds to be made to cattle producers.
The CARES Act authorized $34.9 billion in aid to USDA agencies, and $80 million to the Food and Drug Administration. A total of $9.5 billion was allocated to support agricultural producers. In addition, $14 billion was authorized to increase borrowing for the Commodity Credit Corporation to provide direct aid to producers.
Producers were also eligible to sign up for the Paycheck Protection Program through the Small Business Administration. As long as businesses retained employees and used funds for approved purposes, a loan of up to $10 million could be received.
However, the program was first-come, first-serve and already reached its $349 billion limit as of April 16.
The USDA has said it will spend up to $15.5 billion in the initial phase of its plan to support affected producers, according to a report by news outlet Reuters. The plan will include direct payments to farmers and ranchers, along with other support measures.
As of WLJ press time on Thursday, USDA had yet to confirm details of its initial support plan. More details are expected once more money from the CARES Act becomes available. However, in a TV interview on April 15, Secretary of Agriculture Sonny Perdue said the administration plans to buy meat and milk from farmers as part of the effort.
“We want to purchase as much of this milk, or other protein products, hams and pork products, and move them into where they can be utilized in our food banks, or possibly even into international humanitarian aid,” Perdue said.
As the economy approaches its worst state since the Great Depression, concern has risen over when society will be up and running again. Although states have varied in their responses to the pandemic, President Donald Trump was expected to release details after WLJ press time of guidelines to ease COVID-19 restrictions. — Anna Miller, WLJ editor