U.S. Sen. John Thune (R-S.D.), a longtime member of the Senate Agriculture Committee, today discussed the struggling agriculture economy, its effect on South Dakota’s top industry, and his commitment to strengthening it so our country’s farmers and ranchers can weather this storm.
Click here to watch Thune’s speech.
Excerpt of Thune’s remarks below:
“Mr. President, it’s been an incredibly tough couple of months for American businesses and American workers.
“Virtually every sector of our economy is suffering as a result of the coronavirus.
“And the agriculture industry is no exception.
“Farmers and ranchers have taken a huge hit.
“The coronavirus has caused significant market volatility, sending many commodity futures prices plummeting.
“Meanwhile, reduced capacity at U.S. meat-packing plants as a result of the virus has diminished the demand for livestock, depressing prices.
“This has aggravated an already difficult situation for farmers and ranchers.
“Unlike the majority of the economy, which was thriving before the coronavirus pandemic, the agriculture economy had been struggling for a while.
“Low prices, extended trade disputes, and natural disasters had meant a tough few years for farmers and ranchers even before the coronavirus hit.
“Now they’re suffering even more.
“Agriculture is the lifeblood of my state of South Dakota, so when Congress was considering coronavirus relief legislation, support for farmers and ranchers was one of my top priorities.
“I fought to get agriculture relief money included in the Coronavirus Aid, Relief, and Economic Security Act – the CARES Act – which was signed into law in late March.
“The final bill included $14 billion to replenish the Commodity Credit Corporation to allow the Department of Agriculture to provide income and price support for farmers and ranchers, plus an additional $9.5 billion in emergency support for agriculture producers affected by the pandemic.
“Days after the bill passed, I led a bipartisan group of senators and representatives in a letter to Agriculture Secretary Sonny Perdue, urging him to use a portion of the funds to provide support for hard-hit cattle producers.
“I’m pleased that in mid-April, the U.S. Department of Agriculture announced that it would issue $16 billion worth of payments to agriculture producers affected by the virus.
“Payments are expected to reach farmers and ranchers in late May or early June.
“I’ve been monitoring the progress of this relief, and I will continue urging the USDA to issue these payments as soon as possible.
“Agriculture producers can also take advantage of the Paycheck Protection Program included in the CARES Act.
“This program provides forgivable loans to small businesses – including self-employed producers – to help them cover payroll costs during this difficult time.
“Seventy-five percent of the loans must be used for worker salaries and benefits (including the salaries of self-employed workers), while the remaining amount can be used for other qualifying expenses like mortgage interest, rent, and utilities.
“The loan can be forgiven completely, as long as borrowers follow the requirement that at least 75 percent of the loan be used to cover worker salaries and benefits and the remainder is spent on other qualifying expenses.
“And as of this week, farmers and ranchers can now take advantage of the Small Business Administration’s Economic Injury Disaster Loan Program, thanks to legislation Congress passed two weeks ago.
“I’m also continuing to monitor the cattle market.
“Livestock producers have taken a dramatic hit on the prices they’re getting for their cattle.
“At the same time, however, the price of packaged meat has risen, and meat packers are seeing record profit margins.
“This raises real concerns about potential instances of price manipulation and other unfair practices within the beef industry, especially considering that four meat-packing companies control more than 80 percent of the beef supply in the United States.
“In March, I called Secretary Perdue to urge the Department of Agriculture to take action to ensure the integrity of the cattle market during the coronavirus pandemic.
“I followed up with a letter requesting that the Agriculture Department’s Packers and Stockyards Division look into the volatility in the cattle market, and Secretary Perdue has agreed to investigate.
“I also sent a letter to Attorney General William Barr requesting an investigation into potential price manipulation or other anticompetitive activities in the beef market.
“Our pork industry is also struggling due to the coronavirus pandemic.
“The temporary closure of the Smithfield plant in Sioux Falls created significant challenges for the 550 independent pork producers from South Dakota and surrounding states, and for our nation’s food supply system.
“In the wake of the Smithfield plant closure announcement, I led a letter to Secretary Perdue requesting financial assistance for pork producers, and I’ve been closely monitoring the situation.
“I am pleased that the Smithfield plant is in compliance with Centers for Disease Control and Prevention and Occupational Safety and Health Administration guidance and will gradually resume operations starting today.
“Mr. President, no discussion of the challenges facing farmers right now would be complete without discussing biofuels.
“Ethanol and biodiesel producers buy up a significant amount of American corn and soy, which adds value to each bushel.
“As demand for fuel has decreased as a result of the coronavirus pandemic, ethanol and biodiesel operations have come offline, and are no longer buying up their normal amounts of corn and soybean oil.
“This has significantly diminished a crucial market for our farmers.
“There has rightfully been a lot of focus on the oil and gas companies that are facing a record loss in demand because of the coronavirus and because of an equally difficult oversupply problem driven by the Saudi-Russian price war.
“Hardworking Americans at these companies, who have helped usher in our modern energy renaissance, are now in limbo, and Congress needs to make sure we preserve our energy dominance and security.
“But it’s important to recognize that the ethanol industry, which provides over 10 percent of the nation’s gasoline content – the cleanest 10 percent – is a part of that.
“Biofuels too have been a key part of America’s energy renaissance and have also been hit hard by the sudden drop in demand, which has been a devastating blow for workers in the industry and for the farmers who supply them.
“Half of the nation’s ethanol capacity has been idled – half.
“More than 70 plants have closed – and just as many have idled – directly harming their local economies and again, drying up that essential market for our farmers.
“This has brought a new problem: Many Americans may not know it, but a substantial quantity of food-grade carbon dioxide, the CO2 used in carbonated beverages or to quickly chill meat products, is an ethanol byproduct.
“This means that not only is ethanol part of our energy security and a foundation of our ag economy, it also plays an important role in our food supply.
“The coronavirus is already straining our meat processing industry – we should not allow a CO2 shortage to deepen the problem.
“As Congress addresses the numerous challenges facing farmers and energy producers, we must make sure that ethanol relief is part of the discussion.
“Whether it’s through direct support or by advancing long-stalled corn fiber applications at the Environmental Protection Agency, we need to make sure that this American energy success story survives these challenging times.
“Mr. President, as we move forward, I will continue talking to farmers and ranchers about their needs and what we can do to help them get through this difficult time.
“Supporting our nation’s farmers and ranchers will always be one of my top priorities here in Congress.
“The coronavirus crisis has reminded us all just how much we depend on our agriculture producers.
“And I’m grateful every day for the work they do to feed our nation.
“I will continue to do everything I can to strengthen our agriculture economy and help our nation’s farmers and ranchers thrive.”