Posted 04/03/2020

Member Alert: April 3, 2020

The North Dakota Stockmen’s Association (NDSA) is continuing to work on issues related to the ongoing COVID-19 pandemic. 

COVID-19 Livestock Relief Principles

The NDSA established a special Livestock Relief Subcommittee to analyze the COVID-19 pandemic’s impact on the North Dakota cattle industry and to provide advice to help decision-makers develop a meaningful and equitable distribution mechanism for relief provided through the CARES Act. Members include the following: Brian Amundson, Jamestown, cow-calf producer and feeder; Chad Ellingson, St. Anthony, cow-calf and seedstock producer; Tim Erbele, Streeter, cow-calf producer and feeder; Jamie Hauge, Carson, cow-calf and seedstock producer and feeder; Melvin Leland, Sidney, Mont., cow-calf and seedstock producer; Will MacDonald, Bismarck, cow-calf and seedstock producer and feeder; Tim Petry, Fargo, North Dakota State University livestock economist; Dan Rorvig, McVille, cow-calf producer; Jeff Schafer, New Rockford, cow-calf producer and feeder; Larry Schnell, Dickinson, livestock auction market owner and operator; Jason Schmidt, Medina, cow-calf producer and feeder; Roger Stuber, Bowman, cow-calf and seedstock producer; and Warren Zenker, Gackle, cow-calf producer and feeder. 

Through the work of the board and the committee, the NDSA has offered these foundational principles for the U.S. Department of Agriculture to consider as the CARES Act livestock relief program is developed: 

•        The cattle industry should have special consideration as the funding is allocated across agricultural industries. As the largest segment of the U.S. agriculture industry, U.S. cattle production accounts for $67 billion (18 percent) of the $371 billion in total cash receipts from agricultural commodities. It has a presence in each of the nation’s 50 states on 729,046 operations and in each of North Dakota’s 53 counties on 8,245 operations. Additionally, cattle producers are not eligible for traditional safety net programs. 

•        Cow-calf and seedstock producers, stockers, backgrounders and feeders have all been impacted by this pandemic. We believe assistance must be delivered equitably across all producer segments of the cattle supply chain where there is demonstrated loss and financial need. Business size and structure are not reliable determinants of financial need or viability and should not be a prohibiting factor for eligibility. The packing segment of the cattle industry has not suffered a loss due to the pandemic, and the NDSA is firmly opposed to any relief funding being distributed to this segment. 

•        Economic assistance for cattle producers should prioritize need and not disrupt or mask market signals or be a subsidy program that stimulates overproduction or underwrites inefficient and unprofitable operations.

•        The Congressional intent of the CARES Act legislation is to get relief into the hands of livestock producers quickly. In order to accomplish that, to support an already inundated Farm Service Agency network that likely will be tasked with administering the program and to not overburden livestock producers who are in the midst of calving and will soon be branding, breeding and turning cattle out to pasture, we believe the program should be as simple as possible and based on the inventory of three classes of cattle: cows, feeder cattle and fed cattle. It is the NDSA’s intention that newly born calves (399 pounds and less) not be counted as feeder cattle. (This weight break matches with other U.S. Department of Agriculture programs.) 

•        The NDSA proposes a one-time, per-head payment based on qualifying producers’/feeders’ inventories as of Feb. 21. That day was when U.S. cattle markets began to sharply decline after additional COVID-19 diagnoses and with the advent of social distancing rules and business closures. It makes sense that payments are based on past inventories, not future ones, to avoid influencing producer marketing decisions and creating artificial market impacts. For example, let’s say that a producer, on Feb. 21, had 175 cows and 175 2019-born feeder cattle. His payment would be based on 175 x the per-head payment for cows + 175 x the per-head payment for feeder cattle. 

•        The pandemic has sent the cattle market in a nosedive. Losses in the U.S. cattle industry continue to mount. Some of those losses have already been realized and other very substantial losses are still looming. Early – and already very much outdated – projections estimated the combined cattle industry damage to be more than $9.44 billion. The cow-calf industry is the foundation of the entire industry. The NDSA believes that, long term, it will suffer the longest residual impact of the COVID-19 crisis and, therefore, must be at the heart of the relief program. The NDSA suggests the U.S. Department of Agriculture consider a $150-per-head payment based on the applicants’ respective inventories as of Feb. 21. 

•        The NDSA recognizes that there is a finite pool of relief funds available and multiple commodities that will be sharing in the pool. As such, it supports a reasonable cap of $250,000 on the livestock relief support payment to an individual producer. This will also help assure that the dollars are spread across the cattle industry. 

•        The U.S. cattle industry and entire economy have been severely damaged by the COVID-19 pandemic. Relief should be earmarked for U.S. citizens and not flow to those from outside the country who may feed or pasture here, for example. 

Plant rumors

There were rumors yesterday and today that the JBS packing plants in Greeley, Colo., and Grand Island, Neb., would be closing for two weeks. The NDSA has received credible information that those rumors are unfounded and the plants are not planning to close. 

Paycheck Protection Program

Last night, the Small Business Administration (SBA) issued an interim final rule (IFR) providing additional implementation guidelines and requirements for its Paycheck Protection Program (PPP) authorized by the CARES Act. Agriculture producers are eligible for PPP and, if producers are interested in applying, they need to contact their lender as soon as possible. More information about the program can be found at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp. The borrower application can be found at https://www.sba.gov/sites/default/files/2020-04/PPP%20Borrower%20Application%20Form.pdf. 

Industry feedback

NDSA Executive Vice President Julie Ellingson was a panelist at an agricultural roundtable discussion hosted by Sen. John Hoeven today. She shared the NDSA’s foundational principles for the CARES Act livestock relief program and asked for follow-up on a call for an investigation into possible price fixing, collusion and other illegal activity related to the cattle market. She also shared the NDSA’s frustration that the U.S. Department of Agriculture had not released its findings from a similar investigation undertaken following the Holcomb, Kan., plant fire last year. Those findings were expected to be out by late January. 

Congressional support urging relief for cattle producers

The NDSA thanks North Dakota’s senators for being a part of the bipartisan, bicameral letter urging swift relief for American cattle producers who have been adversely impacted by the ongoing COVID-19 pandemic. The lawmakers call for targeted, temporary, equitable relief to cattle producers in a manner that limits market distortions and negatively effects on price discovery. The full letter can be read at https://www.ncba.org/CMDocs/BeefUSA/Media/Bicameral%20bipartisan%20livestock%20asssitance%20letter%204.1.20.pdf. 

Ag economics information

North Dakota State University Extension is hosting a series of agricultural economics webinars in response to COVID-19. The webinars begin at 12:30 p.m. CT each Friday. Presenters include Tim Petry, NDSU Extension livestock economist; David Ripplinger, NDSU Extension bioproducts/bioenergy economist; Ron Haugen, NDSA Extension farm management specialist; Byron Parman, NDSU Extension ag finance specialist; and Frayne Olson, NDSU Extension crops economist. For webinar login information and recordings of all past webinars, visit https://www.ag.ndsu.edu/alerts/coronavirus or search for “NDSU Extension coronavirus.”

Mental health resources

The coronavirus situation and a culmination of other factors have made this a stressful time for many farm and ranch families across North Dakota. Know that you are not alone. If you need someone to talk to, call a friend or a neighbor, our office or 211, a statewide 24-hour crisis intervention, health and human services information and referral line. 

Sale and industry event changes and cancellations

The NDSA is compiling a list of industry event and cattle sale changes and cancellations. The list, along with other coronavirus resources, can be found at http://www.ndstockmen.org/association/industry-issues/COVID_19. If you have a change or cancellation to report, call our office at (701) 223-2522 and we will add it to the list.