Trump Assures Farmers, China Trade Will Save, as They See Prices Plunge, Processors and Markets Shut
April 7, 2020 (EIRNS)—What remains of the family farm system in the U.S. is now under severe crisis—with many farmers, especially older ones, now quitting, either in a planned or abrupt way. At stake is the agriculture production capacity of the United States, a world food supply asset.
The March 27 CARES Act has in it more than $40 billion for aid to farmers through the Agriculture Department’s Commodity Credit Corporation (CCC), founded in the 1930s. Every such stopgap is welcome, but farmers, who have been looted all along by the Wall Street market structure, are now facing chaos. President Donald Trump, when asked about the farmers’ situation yesterday, pointed to the prospect of expanded trade with China as his answer. This needs to change fast.
Farm leaders are conferring urgently. Monday night was a Facebook conference of a multi-state livestock organization based in Montana, known as R-CALF, with 700 participants for the first time ever. R-CALF’s CEO Bill Bullard sent a letter to Trump March 18, asking for emergency measures, e.g. “to grant emergency extensions of loan repayment deadlines, and provide essential emergency operating funds.”
• Prices plunge: Farmers have been whipsawed from low prices and price swings for years, but the last couple months are impossible. Since January, prices received by U.S. corn growers, already low, dropped by 12%; soybean prices dropped 7%. Milk prices have dropped some 30%. Live cattle prices are down 28% since January. Farm families depending on off-farm jobs, now are finding this work suspended. In Virginia alone, for example, 40 dairy farms are in the process of shutting down right now. Nationwide, thousands of farmers in the older age brackets, are quitting.
• Meat-processing chaos. Some slaughtering plants are now shutting down due to lack of workers (who are not coming to work to avoid getting it COVID-19 or spreading it if they’re ill), in a situation where meat packing has become highly concentrated, due to monopolization. Only four packers control 85% of all beef processing: Cargill, Tysons, National Beef/Marfrig, JPS. A huge JBS beef abattoir is shut in Souderton, Pennsylvania; a Tysons pork plant is shut in Columbus Junction, Iowa; and there are about six other major closures. This is backing up to the point that farmers fear a sudden lack of any “market” for their cattle and hogs. One Iowa farmer last night advertised, “Take my pigs for free,” trying to get rid of 1,200, 50 lb feeder pigs. Contingency plans include cutting the feed rations for hogs, to retard their growth, and having sows abort, to reduce the throughput of pigs in the meat chain.
• Milk dumping. This sometimes happens in the spring, when cows’ output surges, but now the dumping around the country is caused by the fact there is no gain to be made in handling a product that loses money.
• Other dumping. The markets of thousands of fruit and vegetable growers disappeared overnight, wherever stay-at-home orders shut restaurants, colleges, hotels, and cruise ships. Some farms are trying to re-tool for supermarkets. Other farm operations cannot function without seasonal labor, most of whom had been migrants, who are now not available, directly or indirectly because of the pandemic.
Certainty is essential for credit and logistics for livestock and crop cycles, but now does not exist. This can be remedied.