As the global coronavirus pandemic intensified around them, closing restaurants, schools and businesses, farmers were forced to dispose of milk, leave crops in fields to decay and euthanize livestock.
The market disruption at the onset of the pandemic in early spring left people up and down the food chain — farmers, processors and consumers — struggling to find answers. Shoppers were left with empty shelves in grocery stores, while farmers were left unable to get commodities to market because processors were full after restaurants closed their doors and school lunches were no longer being served.
“We had been through five tough years at the conclusion of 2019. It’s really been a tough time for agriculture all around,” said Wisconsin Farm Bureau Federation President Joe Bragger, a Buffalo County dairy farmer. “It looked like things were going to turn around late last year, then COVID hit and completely disrupted our supply chains.
“When this started, we didn’t know if we were going to get fertilizer. Were we going to get the crop inputs we need? There were so many unknowns. But the one thing we knew is our farmers were hurting.”
Even as the backlog at processors slowly cleared, plenty of damage had already been done to farmers’ bottom lines, leading to the government to step in and offer some relief.
More than half a year later, and even before President Donald Trump announced another $14 billion funding for a second round of funding for a federal direct-payment farm relief program, the Coronavirus Food Assistance Program, during a campaign stop last month in Mosinee, the U.S. Department of Agriculture estimated that government payments would make up 36% of the estimated $102.7 billion of the country’s farm income this year.
At that point, a little more than $10 billion from the first round of CFAP had gone out to livestock, dairy, non-specialty and specialty crop producers throughout the country who had faced market disruptions and associated costs because of COVID-19.
And in Wisconsin, another $50 million in direct payments through the Wisconsin Farm Support Program had been distributed to more than 15,000 farmers.
Between two rounds of the Wisconsin Farm Support Program and Round 1 and the first several weeks of Round 2 of the federal Coronavirus Food Assistance Program, more than $700 million in federal and state aid aimed at offsetting the disruption caused by the coronavirus pandemic has been distributed in the form of direct payments to Wisconsin farmers as of early October.
In whatever form they take, the payments come, at least in part, from to the Coronavirus Aid, Relief, and Economic Securities Act. The CARES Act was passed by Congress and signed into law by Trump on March 27 and included more than $2 trillion economic relief funding.
“The assistance that’s been passed by Congress was in the trillions of dollars through the CARES Act, and it had an extremely wide reach across America,” said Sandy Chalmers, state executive director of the Wisconsin State Farm Service Agency, which administers the Coronavirus Food Assistance Program in the state. “Producers, of course, should be included in that. They’ve been impacted just like everyone else. Uncertainty, market volatility, price decline, surplus production, demand downward pressure, it continues. But hopefully we’re coming out of it and we turn the corner soon.”
The Coronavirus Food Assistance Program, announced by U.S. Secretary of Agriculture Sonny Perdue in mid-April, was the first source of direct payments for farmers with funds coming from the CARES Act. Perdue at the time said the program would provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic. The CFAP announcement also included plans for the federal government to purchase up to $3 billion of agricultural products to be delivered to those in need, a program administered by the USDA’s Agricultural Marketing Service known as the Farmers to Families Food Box Program.
“Food production is a national security-issue for all Americans,” Chalmers said. “If you eat, you have an interest in keeping American agriculture viable. Congress gave us the funding with the intent that we at USDA use it to support agriculture during these times to keep farms operating because we have a national-security interest in keeping the agriculture sector viable.”
As of Sept. 28 in the U.S., the USDA’s FSA had approved $10.2 billion distributed to 642,000 producers across the country. Deadline for that first round of CFAP passed in mid-September, but some funds are still being distributed as the deadline in three states was extended to early October due to natural disasters.
Wisconsin was one of six states to pay out more than $500 million in Round 1, trailing only Iowa, California, Texas, Nebraska and Minnesota. Iowa led the way with nearly $969 million in payments coming from the first round of CFAP.
As of Oct. 5 in Wisconsin, CFAP 1 had paid out about $524 million on about 18,903 applications, Chalmers said. About two-thirds of that went to payments based on milk production. About 6,200 of Wisconsin’s approximately 7,000 dairy farms applied for CFAP assistance, she said.
“The dairy sector here in Wisconsin certainly was lifted up by that infusion of cash,” Chalmers said. “It really was a lifeline for dairy and livestock producers. It can’t be overstated, what an impact that has had.”
In April and May, Chalmers said the FSA in Wisconsin was receiving dozens of calls a day from dairy and livestock producers seeking assistance.
“The stress was real,” she said. “The impact of both CFAP programs has been significant.”
The Coronavirus Aid, Relief and Economic Security Act also included $150 billion in direct assistance for state, territorial and tribal governments through the Coronavirus Relief Fund, which allocated each state with a minimum of $1.25 billion. Wisconsin had a little less than $2 billion to spend from the CARES Act, according to a report from the U.S. Department of the Treasury Office of Inspector General.
In mid-May, Wisconsin Gov. Tony Evers introduced the $50 million Wisconsin Farm Support Program using funding from the money Wisconsin received through the federal Coronavirus Aid, Relief, and Economic Security Act.
In mid-April, a group of eight organizations representing Wisconsin farmers, including Bragger’s Wisconsin Farm Bureau, sent a letter to Evers making a case for $50 million in aid after calculating the economic impact of the pandemic on agricultural sectors.
“When we were having discussions back in March, some groups may not have realized what the potential losses may have been,” Wisconsin Department of Agriculture, Trade, and Consumer Protection Secretary-designee Randy Romanski said. “When that request was made, that seemed like a logical amount of money at that time.
“In reality, if you look at actual losses that were going on in agriculture, considering agriculture is a $104 billion industry in Wisconsin, it’s really difficult to project, because you might be talking millions of dollars a week.”
Through discussions with the ag groups, the decision was made to have the $50 million Wisconsin Farm Support Program go to farmers as direct payments. Evers also announced an additional $15 million program called the Food Security Initiative, aimed at buying Wisconsin agricultural products and distributing them in an effort to combat hunger in the state.
“The governor’s goal at the time was: farmers are hurting right now, I want to get the dollars out to them as quickly as possible so they can use that to supplement what they may be receiving with the federal CFAP dollars,” Romanski said.
The Wisconsin Department of Revenue administered the program, and in the first round, $41.6 million was distributed to nearly 12,000 farmers in 71 of Wisconsin’s 72 counties. Payments were available for farmers who had a gross income between $35,000 and $5 million based on 2019 tax filings, and each farmer whose application was accepted received $3,500.
“That $3,500, in and of itself, will not make a farm that’s struggling whole,” Bragger said. “What it does do, especially in a time of crisis, is shows the state’s commitment to agriculture. It’s a morale boost, the state saying, ‘We recognize the importance of agriculture to Wisconsin and we are going to support that.’”
In a second round of the program, more than 3,300 Wisconsin farmers received a total of $8.4 million in funding. Average payments from the second round came to about $2,500, according to DATCP Deputy Secretary Angela James.
The second round of funding was open to farmers whose gross income from farming in 2019 was between $10,000 and $5 million. Almost 60% of funding recipients reported a gross income from farming of less than $40,000 in the second round, Romanski said.
“Between the programs that are out there, and through the groups we’ve talked with about the Farm Support Program, is many of them have applied for CFAP as well,” Romanski said. “When something like COVID-19 happens, there has to be some type of response from Congress and USDA to help during times of dramatic economic disruption.
“And we are in times of economic disruption right now. I think farmers are taking the opportunity to identify their losses and connect to federal and state programs that can help them during these challenging times.”
During a Sept. 17 campaign stop in Wisconsin, a state he won by a little more than 20,000 votes, less than one percentage point, in 2016, Trump announced another $14 billion funding for a second round of the Coronavirus Food Assistance Program.
The second round of CFAP is set to provide up to $14 billion in direct support for agricultural producers of eligible commodities who continue to face market disruptions and associated costs due to COVID-19. Funds for CFAP 2 are coming from the Commodity Credit Corporation Charter Act and CARES Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities, according to the U.S. Department of Agriculture. Congress provided a $14 billion replenishment of the CCC in the CARES Act for coronavirus relief for agriculture that became available in mid-July.
“We’re throwing around some pretty eye-popping numbers here,” Chalmers said. “Our FSA programs are always built at a payment rate that’s below making somebody whole. Most of these payment rates are looking at 80% of the price decline. That’s not making producers whole.”
Applications for the second round opened Sept. 21 and run until Dec. 11. Information is available at farmers.gov/cfap or local FSA offices.
As of Oct. 6, about two weeks into the application period, more than 4,000 Wisconsin farmers had been approved for about $150 million in CFAP 2 funding. Dairy accounted for more than half of the state’s CFAP 2 payments, with 1,229 farmers bringing in about $79 million.
“One of our goals in USDA was to make this program as easy to administer as possible, given the COVID situation,” Chalmers said. “This is a critical time for our producers, and we wanted to make sure the assistance flowed very quickly.”
Chalmers said the time between a completed application and payment has been about five days.
“The early days of the signup, our numbers were going up by $20 or $30 million a day,” she said. “The demand is there. But we are getting things turned around pretty quickly for the producers.”
The first round of CFAP looked at price declines from January to April due to COVID-19. The second round looks at a window from the middle of January to the end of July, a time span that expanded the number of commodities eligible for the program.
“When you step back and take that much longer view of COVID and its impact on ag markets, you’re going to have many, many more commodities impacted,” Chalmers said. “There are very few commodities that are not eligible for CFAP 2.
Chalmers said FSA has been seeing a good response to the program from traditional FSA customers like dairy and grain farmers and they are starting to see a response from cranberry, ginseng, mink and farmers market growers.
“Our goal is that this assistance helps as many Wisconsin farmers as possible,” she said. “We have an interest in keeping our agricultural producers viable. The timing of CFAP 1 was absolutely critical, and it did help a lot of producers keep their nose above water. And the timing of CFAP 2 is critical as well.”
“There were certainly some significant dollars going to farmers,” Bragger said. “That’s had a huge impact.”
Bragger said he’s hopeful that once the country and the world emerge on the other side of the coronavirus pandemic, the “new normal” will include policy changes to address the supply-chain disruptions that occurred at the onset of the pandemic.
“We were disposing of products while we had empty spots on store shelves,” Bragger said. “We really need to look at our entire supply chain and looking at how we can be more nimble and adaptive.”
Still, Bragger said, farmers remain optimistic that prices will improve and the agriculture industry will emerge stronger from the pandemic.
“Our businesses are long-term. Every year we put a seed in the ground, hope the weather hits right, hope this crop will be better than last crop, and we hope the prices will be better,” he said. “There’s a lot of hurt right now, but there’s a lot of optimism. Otherwise, we wouldn’t be doing what we’re doing.”