CHICAGO (Reuters) – U.S. livestock producers are urging the Department of Agriculture to let them defer or adjust payments for government loans as the COVID-19 virus hits the already struggling farm economy, the largest U.S. farmer trade group said.
The American Farm Bureau Federation’s request was made in a March 17 letter outlining a wide swath of concerns, ranging from access to farm labor to supply chain worries of the fast-spreading virus. Many U.S. economic sectors have sought federal government relief.
“For many livestock producers, (USDA) Farm Service Agency loan payments are due now,” Farm Bureau President Zippy Duvall said in the letter. “Can USDA consider temporary relief (such as deferment or loan adjustment) to help producers respond to the impact the pandemic is having on normal marketing and prices?”
A cattle group also asked Perdue for a COVID-19 virus bailout, using the same pool of funds the Trump administration tapped for nearly $30 billion in aid related to the U.S.-China trade war.
“In short, funds and programs are needed to ensure that cattle producers and feeders that are experiencing excessive price losses are provided immediate relief,” according to the United States Cattlemen’s Association’s letter to Perdue, dated March 16, which was also sent to members of Congress.
April live cattle futures LCJ0 have dropped 12% this month on the Chicago Mercantile Exchange and are down 25% since the start of the year.
Efforts to secure debt assistance for farmers have been growing this week, as the fast-spreading virus triggers emergency lockdowns and cash injections unseen since World War Two.
Late Monday, the Farm Credit Administration (FCA) said lenders in the government-sponsored Farm Credit System (FCS) should begin working with agricultural borrowers, including possibly restructuring debt obligations, for those whose operations are being affected by the coronavirus.
U.S. agriculture is working diligently to maintain the stability of our food supply as concerns over #COVID19 lead to increased consumer purchases of groceries and other items. https://t.co/RB9ojsiYjZ https://t.co/zgQS28j6OX
— American Farm Bureau (@FarmBureau) March 17, 2020
Lenders can extend loan repayment terms or ease new loan documentation terms for certain borrowers, Glen Smith, board chairman of the nation’s regulator for the Farm Credit lenders, said in a statement.
System regulations give lenders “considerable flexibility to provide relief to borrowers affected by COVID-19” and the coronavirus outbreak, Smith said.
The FCS system is a leading source of financing for U.S. farmers, and accounted for more than 36% of the nearly $402 billion in U.S. farm debt as of 2018, according to the most current USDA data.