Praise for farm aid, criticism for meatpackers: Under secretary's visit a mixed bag
The threat of infection had kept the USDA Under Secretary for Farm Production and Conservation cooped up in Washington D.C. for months. On July 15 he arrived in Great Falls, noting that his trip to Montana was the first he'd made outside the beltway since last March.
"One of the best parts of the job is to get out of D.C. and be able to get to real farm country," Under Secretary Bill Northy said to an assemblage of Montana ag producers who gathered at a machine shop on the Bumgarner farm east of Great Falls last Wednesday.
USDA Under Secretary Bill Northy responds to questions at Wednesday's Montana ag roundtable
Northy had arrived at the invitation of U.S. Sen. Steve Daines, R-Mont., and was ostensibly in central Montana to discuss the Coronavirus Food Assistance Program (CFAP), a $19 billion federal relief program to mitigate losses suffered by U.S. ag producers due to the COVID-19 pandemic.
The CFAP was approved by Congress on April 17 in response to widespread agricultural price collapses. The program is separated into two parts:
» $16 billion was set aside for direct payments to ag producers capable of demonstrating at least a 5% loss in market prices during the first 3½ months of 2020.
» And an additional $3 billion is being allocated on a month-by-month basis for federal food purchases to assist the needy.
CFAP payments to farmers and ranchers have been slow to roll out. The first checks began arriving in early June, but according to USDA statistics, only $5.36 billion of the promised $16 billion had been distributed as of July 6.
Charlie Baumgarter, past president of the Montana Grain Growers Association, thanked Northy for the federal government's relief efforts but noted shortfalls in response to losses grain growers potentially face in the months ahead.
"The malt plant had to shut down for eight weeks," Baumgarter said, referring to the International Malting Company plant in Great Falls. "So we're sitting here with probably 90% of last year's barley crop in our bins. We're coming up with a pretty good crop this year, so now we're having to build bins. The risk that we run will be if that barley will go out of condition (no longer marketable for human consumption). If it (does) then we go to feed barely, and you lose $2 to $3 a bushel on that. There was no help under contract because we never lost any prices on that."
Charlie Bumgarner, a past president of the Montana Grain Growers Association, questions USDA Under Secretary Bill Northy regarding the Coronavirus Food Assistance Program
Northy noted that the CFAP was drafted quickly and not every loss contingency was included.
"It's been a challenge trying to capture some of these unique situations," Northy said. "You don't have to normally carry two years of barley. You don't expect for that to happen. (CFAP) really was designed to say, let's look at the losses that happened in that first quarter. We're trying to figure out what a next round of coronavirus food assistance program might look like."
In an interview with the digital farm journal Ag Web,Northey said the USDA is awaiting direction from Congress on a new CFAP aid package. Analysts expect the next round of payments through the program to compensate farmers for losses that have occurred since mid-April.
"Congress has said very clearly that they recognize the losses are well beyond that $16 billion," Northey told Ag Web.
Sign-ups for the initial round of CFAP are set to expire on Aug. 28. Qualifying producers can apply through their local Farm Service Agency or online at https://www.farmers.gov/cfap.
Meatpacking grabs center stage
While attendees of the roundtable generally expressed gratitude for the USDA's COVID-19 relief efforts, the focus of attention quickly turned to frustration with the slow pace of reform within the nation's meatpacking industry.
For decades cattlemen's groups have alleged that the highly concentrated meatpacking industry engages in anti-competitive practices that lower the prices ranchers and feedlot operators receive for their animals while padding the profits of the four multi-national meatpacking corporations that control the American beef, poultry and pork markets.
Allegations of meatpacker collusion rise as independent ranchers struggle to survive
Third generation Montana cattle rancher Brett DeBruycker questions USDA Under Secretary Bill Northy regarding a Justice Department investigation into collusion within the U.S. meatpacking industry.
On May 6 the U.S. Justice Department launched an investigation into allegations that U.S. meatpackers broke antitrust law because the prices paid to farmers and ranchers have declined even as meat prices at grocery store shelves rose. Two months later there has been little word on what progress, if any, has been made in that investigation.
"The beef packers are running amok," Brett DeBruycker told Northy. "They have total control of this industry, and if something isn't done from a legislative standpoint immediately, this entire cattle feeding industry and the cattle industry following it is going change and it's not going to be to the benefit of producers."
DeBruycker is a Dutton area rancher and feedlot operator, and board member for the National Cattlemen's Association.
"A month ago when the packers were netting $2,000 a head the feeders were losing $500 a head," he told Northy. "Here today they're still netting $350 to $400 a head and the feeders have a net loss of $350 a head. "We have structural issues in that industry that have to be attacked. I'm sick and tired of getting abused by the packers."
DeBruycker said his family has been in the feedlot industry since the 1960s, but the situation within that industry has become so dire that he and his brother are having conversations about leaving it. He told Northy that he considered investing in a small Montana meat packing plant to try and bypass corporate packer control, but USDA restrictions on beef exports beyond Montana's borders made it impractical.
"We need to have the ability to have state-inspected beef processing plants and be able to export outside of the state," DeBruycker said. "If I'm not able to export the meat I produce and the meat I process out of Montana — I'm leaving 329 million potential customers at large. Why would I want to make an investment in something like that ... if I'm only able to sell to a million customers here in Montana? It just doesn't make sense."
Sen. Daines, who has been a vocal supporter of the DOJ investigation into the meatpacking industry, told DeBruycker he was preparing to introduce a Senate bill to break down the barriers preventing state meatpackers from exporting across state lines. He assured those attending the roundtable that the DOJ investigation offered a real avenue for change within the meatpacking industry.
"This has escalated beyond just (U.S. Ag Secretary) Sonny Perdue," Daines said. "Attorney General Barr is now part of this investigation with subpoena power. The subpoena power that the DOJ has is a new level of investigative powers. I'm launching a letter today in fact ... to expand this into the Packers and Stockyard Act as well. We've got to keep the full maximum pressure on. It's a crisis unlike anything we've ever seen before."
Walter Schweitzer, President of the Montana Farmers Union, commented that the "cheap food" philosophy that the Department of Agriculture has promoted since the 1970s is now undercutting food security in the United States.
"To get cheep food you have to be efficient, and we've been driving efficiency to where we have this concentration of our processors or packing plants," Schweitzer said. "We need to regionalize, not just beef packing - that's where the glaring example is right now, but its across the board. It's in our cereal grains, its in all of our commodities. We've become so concentrated that it just takes a little hiccup, like we've experienced in the last three or four months, to put our consumers - the people of America at jeopardy. We need to focus on food security, not cheap food."
By: David Murray
Source: Great Falls Tribune
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