Agricultural News
AFR/OFU Applauds Introduction of Cattle Market Disaster Compensation Bill
Fri, 20 Mar 2020 08:32:43 CDT
Senator Mike Rounds (R-S.D.) plans to introduce standalone legislation March 20 that will address the current volatility in the cattle market caused by COVID-19. The legislation would direct U.S. Secretary of Agriculture Perdue to use Commodity Credit Corporation (CCC) funds to offset cattle producers' losses in the live and feeder cattle markets using USDA Economic Research Service 2020 projections as a baseline.
"Oklahoma's cattle producers have endured incredible diversity over the last few years and the unprecedented market volatility has taken a toll on our industry," said AFR/OFU Cooperative President Scott Blubaugh. "The additional market disruption caused by COVID-19 is the last thing we needed at this time. I commend Sen. Rounds of South Dakota for his action and leadership on this vital issue and urge Sens. Lankford and Inhofe to support this legislation that can bring much needed stability to the nation's cattle market."
The proposed legislation would use USDA Economic Research Service 2020 projections as a baseline for market losses. Producers would report to their local Farm Service Agency (FSA) office the month(s) in which they sold cattle and the number of head sold. USDA would then compare the reported average sales prices to the indexed feeder or live cattle average to determine the COVID-19 market disruption.
For example, USDA projected that in 2020 feeder cattle would sell at an average of $150 per hundred weight. If a producer sold cattle in April, USDA would calculate the average sales price for that month and pay the producer the difference based on the amount and weight of cattle sold. If the average sale for the month of April was $130 per hundred weight, each producer (regardless of individual sale price) would qualify for a $20 per hundred weight market correction.
This concept would apply to cattle being sold for slaughter as well as cattle being sold to a feedlot. The market correction would apply to 2020 months only. If the market rebounds and the average sale for the month(s) reaches the USDA 2020 projected price, then no payment is necessary.
AFR/OFU Cooperative is a membership services organization established in 1905 as Oklahoma Farmers Union. AFR/OFU provides educational, legislative and cooperative programs across the state and serves as a watchdog for Oklahoma's family farmers and ranchers and rural communities. The organization is actively supportive of the state's agricultural industry and rural population with membership consisting of farmers actively involved in production agriculture and non-farmers adding their voice in support of AFR/OFU principles.
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