For the Week Ending June 12, 2020
USDA CLARIFIES CFAP LIVESTOCK PAYMENT CALCULATIONS
On Friday, USDA issued a Federal Register notice, clarifying a handful of provisions in the Coronavirus Food Assistance Program (CFAP), which provides direct payments to farmers impacted by the COVID-19 crisis and was issued last month. Among the changes, USDA clarified CFAP payment calculations for livestock, including the calculations based on unpriced livestock sales from Jan. 15-April 15, 2020, and those based on livestock inventory owned between April 16-May 14, 2020. Under the change, the swine provisions now read as: “Payments for hogs and pigs will be equal to the sum of the results of the following two calculations: (1) Unpriced hogs and pigs sold between Jan. 15-April 15, 2020, multiplied by the CARES Act payment rate in paragraph (h) of this section; and (2) Hog and pig inventory owned between April 16-May 14, 2020, multiplied by the CCC payment rate in paragraph (h) of this section.” Read the Federal Register notice here. CFAP includes $3 billion in planned agricultural product purchases and $1.6 billion in direct payments to hog farmers. NPPC continues to advocate for solutions to sustain pork producers through a crisis that, without additional government intervention, will likely lead to consolidation and contraction in a highly competitive farm sector. For more information, visit https://nppc.org/issues/issue/your-food-is-our-priority/.
SENATORS INTRODUCE BILL TO REVISE AGRICULTURE QUALIFICATION IN PPP
On Tuesday, Sens. John Thune (R-S.D.) and Tammy Baldwin (D-Wis.) introduced the Paycheck Protection for Producers Act (S. 3918), which would revise the way agricultural producers calculate their Paycheck Protection Program (PPP) loan award. Under current language, PPP eligibility for sole proprietors is determined by net profit taken from the 2019 IRS Schedule F form. For many U.S. pork producers, 2019 was not profitable as they bore the brunt of trade retaliation in China and Mexico, among two of our largest export markets. This legislation would allow producers filing a Schedule F to use their 2019 gross income (up to $100,000) when calculating their PPP loan rather than net income.
VIETNAM RATIFIES EU TRADE AGREEMENT
On Monday, Vietnam’s National Assembly ratified the free trade agreement (FTA) with the European Union. When it takes effect likely next month, the EU will remove 85 percent of its tariffs on Vietnamese goods, with the remainder gradually phased out over the next seven years. In exchange, Vietnam will remove 49 percent of its import duties on EU exports, with the remainder phased out over 10 years. The FTA extends tariff relief similar to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the U.S. does not have. The FTA was signed in Hanoi in June 2019 and ratified by the European Parliament in February.
WHAT’S AHEAD?
USTR LIGHTHIZER TESTIFYING BEFORE CONGRESS
U.S. Trade Representative Robert Lighthizer will testify on Wednesday, June 17 before a House Ways and Means Committee virtual hearing at 10am ET and an in-person hearing by the Senate Finance Committee at 3pm ET. His testimony comes a few weeks before the U.S.-Mexico-Canada (USMCA) trade agreement is due to come into force on July 1, and as the U.S. is focused on trade deals with the U.K. and Kenya this year.
WEST COAST PORTS TO CLOSE FOR ONE DAY
The International Longshore and Warehouse Union announced this week that on Friday, June 19, the ports of Los Angeles, Oakland, Seattle, San Diego and other West Coast terminals will be closed for one day, in observance of George Floyd and others killed or injured by police. More than 60 percent of U.S. pork that is exported is sent through West Coast ports.