March 19, 2020

US livestock producers urge USDA to defer loan payments due to COVID-19

The American Farm Bureau Federation called on the US Department of Agriculture (USDA) to allow farmers to adjust payments or defer their government loans as COVID-19 has impacted the farm industry, reported Reuters.

According to the largest US farmer trade group, concerns over COVID-19 include possible problems over farm labour and supply chain issues.

The US Cattlemen's Association has also called for a COVID-19 bailout using the US$30 billion in funds US President Donald Trump earmarked for aid as part of the US-China trade war.

Live cattle futures on the Chicago Mercantile Exchange have fallen 12% in March 2020 and has decreased 25% since 2020 began.

Measures to provide debt assistance to US farmers have increased, as COVID-19 has triggered emergency lockdowns and cash injections last seen in World War Two.

The Farm Credit Administration (FCA) urged lenders under the Farm Credit System (FCS) to work with borrowers in the agriculture industry. This includes efforts to restructure debt obligations for producers affected by COVID-19.

Glen Smith, Farm Credit lenders board chairman said lenders could postpone loan payment terms or make new loan documentation terms more accessible to specific borrowers.

According to USDA data, the FCS is a biggest financing source for US farmers, which makes up 36% of the US$402 billion in agriculture debt in 2018.

-      Reuters