The next round of USDA's Coronavirus Food Assistance Program (CFAP) and prospects for aid to farmers affected by the recent derecho and Hurricane Laura along with China's implementation of its Phase One agreement commitments were among the topics addressed by USDA Secretary Sonny Perdue during a session at the National Association of State Departments of Agriculture (NASDA) 2020 Annual Meeting.

COVID-19 came on the heels of what had already been a "challenging few years" for US ag, Perdue told NASDA members. USDA has "done a lot of work to try to mitigate" those challenges, he remarked, noting CFAP as the latest examples of the department's efforts.

Getting CFAP direct payments to farmers quickly was a top priority for the department when it unveiled the program during the spring, and Perdue again suggested a coming second round of aid could help address shortcomings the department had to grapple with as it initially pushed to get aid out the door.

Since CFAP only covered losses incurred through April 15, not subsequent losses there has been criticism from many commodity groups which point out many losses, and sometimes the most substantial ones, were seen after that date. "We have listened and will be coming with a CFAP 2 program," Perdue said, which will address that issue.

Besides direct payments, Perdue pointed to another aspect of the aid effort—the Farmers to Families Food Box Program—with an additional $1 billion President Donald Trump recently announced for the effort. Perdue called the program a "win-win-win situation, helping our farmers have a market, helping those middle men whose trucks and workforce were idled go back to work, and then certainly, the best part of all was to be able to provide food to those people who didn't maybe know where their next groceries would come from."

Perdue also touted administration actions to keep meat and poultry processing plants operating, preserving access to H-2A foreign ag guestworkers and ensuring ag businesses are eligible for emergency COVID-19 business loans.

Trade deals noted

While trade has "been overshadowed" by COVID, Perdue reminded that has been an area of progress. While China got off to a "fairly slow start" in meeting their purchase commitments under the Phase One deal, he noted that the pace has since picked up and "you've seen record corn shipments and even [soy]bean shipments here recently."

Part of the shift is seasonal, Perdue added, noting that China's ag imports from Brazil seen earlier in the year have slowed, owing to their different growing and harvesting seasons compared with the US. "We think we will own that market probably through next January again until the next Brazilian crop comes in," Perdue said of soybean exports to China.

Beyond ag purchases, Perdue said China has done "a fairly honest job in trying to resolve these non-tariff technical glitches that we've had for a long time." While not perfect, he noted that USDA feels "really good" overall about compliance with the agreement so far.

Meanwhile, the new US-Canada-Mexico Agreement (USMCA) took effect in July, which he said along with the Phase One agreement have helped provide more certainty regarding key US trade relationships.

Disaster aid hinges on Congress

Prospects for aid to farmers affected by the recent Midwest derecho and Hurricane Laura last week along the Gulf Coast were raised by NASDA members. However, Perdue said the question of an ad-hoc aid package "is up to Congress."

Unlike 2019 where USDA was essentially given "carte blanche" by Congress to craft the Wildfire and Hurricane Indemnity Program Plus (WHIP+) aid program, "we don't have that same authority this year," Perdue noted. He said it would not be a surprise if Congress provided additional aid for derecho- and hurricane-affected farmers. But USDA is looking at what resources, even if limited, that it does have to in the meantime to assist affected farmers, he noted.

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.