Trump: $19B farmer relief bill is 'well deserved'
Coronavirus crisis will reportedly cost farmers $20B in net income this year
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American farmers who have been negatively impacted by the global coronavirus crisis have a multi-billion dollar relief package heading their way.
On Friday, President Trump and U.S. Agriculture Secretary Sonny Perdue announced a $19 billion relief package to hopefully alleviate some of the pressure the agriculture industry has been feeling amid coronavirus.
According to Perdue, the government will purchase $3 billion in dairy, meat products and produce and will issue $16-billion worth of direct payments to ranchers and farmers with the goal to boost their income.
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"This will help our farmers and our ranchers, and it's money well deserved," President Trump said while announcing the package.
The pandemic only increased the woes farmers were already facing in 2020 as the result of trade disputes with China. U.S. farmers are projected to lose $20 billion in net income this year according to a report published this month by the Food and Agricultural Policy Research Institute at the University of Missouri.
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Milk prices continue to crash as the coronavirus pandemic chokes off most of the industry’s usual customers, as previously reported by FOX Business.
According to the Dairy Farmers of America, total U.S. dairy demand has fallen by 12 percent to 15 percent since the coronavirus outbreak.
About half of total demand comes via grocery store sales and the other half is derived from the food-services industry, which includes restaurants, hotels and airlines: All of which have been crippled by coronavirus.
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Estimates show that while demand at grocery stores has jumped roughly 20 percent since the outbreak, it has fallen by about 40 percent due to closings of restaurants and the food distributors that serve them.
The U.S. exported $6 billion of dairy in 2019, the highest in five years, according to the U.S. Dairy Export Council. Anywhere from 12 percent to 70 percent of the U.S. milk crop is exported, whether it's in cheese, dried milk or whey form.
Plus the pandemic has made the situation more difficult with dairy prices falling due to school closings eliminating sales to school cafeterias as well as restaurants. Some analysts estimate milk prices could drop by as much as 25 percent this year as a result of all these developments.
“Having to dump milk or plow under vegetables ready to market is not only financially distressing but it’s heartbreaking as well for those that produce them," Perdue explained.
The coronavirus relief package passed by Congress a few weeks ago, the CARES Act, initially tried to address some of this disparity by putting aside around $48.4 billion for the U.S. Department of Agriculture.