Nebraska’s Congressional Delegation urges USDA assistance for cattle producers

April 2nd, 2020 | Kinsey Senkel

Nebraska’s Congressional Delegation was part of 143 members of Congress calling for assistance to cattle producers amid the COVID-19 pandemic.

Senators Deb Fischer and Ben Sasse along with Congressman Jeff Fortenberry, Don Bacon and Adrian Smith signed a letter to the U.S. Department of Agriculture  Secretary Sonny Perdue requesting that he provide immediate assistance to cattle producers by using the resources provided in the recently enacted Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act.

The members of Congress believe USDA action would help facilitate the stabilization of farm and ranch income for producers who are facing market volatility in the wake of the COVID-19 pandemic and economic fallout.

According to Rural Radio Network market anchor Clay Patton, since the beginning of March, cattle producers have seen a bear market.

June live cattle futures have dropped nearly $18/cwt to $87/cwt.

To give more context based on the drop in futures a 1,400lb finished steer priced at the beginning of March at $105.45 went from a value of $1,476.30 to a value of $1,225.98 based on the same 1,400lb finished steer priced at $87.57. This shows a loss of roughly 17% their value per head in one month.

In the same time frame, boxed beef prices went on a bullish run from the end of February with the choice cutout going from $205/cwt on Feb. 21st to nearly $255/cwt by March 27 –  or an increase of about 22% in just over a month.

The rise in boxed beef came as consumers panic bought in bulk and stores could not keep meat counters stocked. This increased packer profit margins by some analysts estimates to as much as $500 per head as they sold their product higher and purchased inputs lower.

Feeder cattle have not been immune to the decline. May feeder cattle futures went from $137.62 at the beginning of March to $118.40/cwt on the first of April. Seeing a drop of nearly $20/cwt.

The CARES Act replenished the Commodity Credit Corporation and appropriated an additional $9.5 billion for USDA to assist producers, including livestock producers, throughout this crisis.

Click here for a full list of the more than 140 members of Congress who joined Senator Fischer in sending today’s letter to Secretary Perdue.

Full text of the letter below:

The Honorable Sonny Perdue
Secretary
U.S. Department of Agriculture
1400 Independence Avenue, SW
Washington, DC 20250

Dear Secretary Perdue,

We write to request swift assistance for cattle producers with the resources provided in the recently enacted Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act to facilitate the stabilization of farm and ranch income to producers who are facing market volatility in the wake of the COVID-19 pandemic and economic fallout.

Recognizing the market volatility and financial hardships producers are facing because of COVID-19, the CARES Act provides $14 billion toward replenishment of the Commodity Credit Corporation and an additional $9.5 billion for the U.S. Department of Agriculture (USDA) to assist farmers and ranchers in response to COVID-19.  While we do not know what the full market impact will be for the various commodities produced in our states, we recognize that there is an immediate need for assistance for our cattle producers.

We request that USDA consider data and estimates available from the Office of the Chief Economist and implement a program that would directly respond to the negative effect on producers caused by COVID-19.  This program should deliver targeted, temporary, equitable relief to cattle producers in a manner that limits market distortions and negative effects on price discovery.

The COVID-19 outbreak has demonstrated the need for domestic food security.  All farmers and ranchers are vital to our country’s ability to keep food on the table in a future pandemic or related crisis, and many producers, including young producers, are often highly leveraged and cannot fall back on years of equity in a time of crisis.  As such, we urge you to quickly deliver relief to producers as we work to lessen the economic impact of this pandemic.

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