News images of farmers dumping milk, depopulating animals, or plowing under vegetables, and of people lined up at food banks form indelible reminders of how deeply the novel coronavirus has affected producers and consumers in the United States.
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Explore This IssueJune/July 2020
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U.S. Secretary of Agriculture Sonny Perdue is trying to bridge that disconnect. On May 4, 2020, USDA released details of purchasing $470 million in surplus food during the fiscal quarter that ends on June 30 and distribute it to communities nationwide.
The purchases are part of the $4.89 billion in American-grown and produced agricultural products USDA will buy and distribute for the remainder of this fiscal year.
Included in that purchase is a $3 billion USDA pledge announced April 17 to buy farm products as part of the $19 billion Coronavirus Food Assistance Program (CFAP). USDA’s Agricultural Marketing Service (AMS) will procure $100 million per month each of fresh fruits and vegetables, dairy products, and meat products to provide a pre-approved box to food banks and other nonprofits through the Farmers to Families Food Box Program.
The remainder of CFAP consists of $16 billion in direct support to farmers and ranchers based on actual losses where prices and market supply chains have been affected. The money is aimed at assisting them with losses in demand and the short-term oversupply for the 2020 marketing year caused by COVID-19.
USDA says the program came about because the U.S. food industry has high inventories related to lesser demand from closed food service establishments, restaurants, and schools. In addition, prices producers typically receive have declined. At the same time, food banks, food pantries, and other organizations across the country are seeing unprecedented high demand.
“America’s farmers and ranchers have experienced a dislocated supply chain caused by the coronavirus,” Perdue says. “USDA is in the unique position to purchase these foods and deliver them to the hungry Americans who need it most.”
AMS will spend the new tranche of $470 million on a wide variety of fruits, vegetables, meat, dairy, and seafood products under Section 32 of the Agricultural Adjustment Act of 1935. The highest purchase amount, $120 million, will go to dairy products, followed by $50 million each to the potato and turkey industries. The foods will go to USDA’s nutrition assistance programs, including to food banks that serve as the nation’s food safety net.
While we have seen great disruptions in the supply chain in the past influenced by environmental issues, geopolitical factors, or safety concerns, we have never seen a situation where every point of the supply chain across the entire world has been impacted at once.—Cathy Burns, CEO, Produce Marketing Association
The purchases from the agriculture sector are being determined by industry requests, market analysis, and food bank needs. AMS will begin issuing solicitations in June and intends to start deliveries in July. More information is on the “Selling Food to USDA” page on the AMS website. Solicitations will be posted to the AMS Open Purchases Request website once it is available. USDA says it also will consider industry requests for future purchases using Section 32 funds.
Good Start, More Needed
These USDA programs are helpful to food service providers, but more is needed in almost every sector to ensure that the food industry as a whole will emerge from the COVID pandemic able to continue doing business.
Chicken. The purchase program certainly benefits chicken producers, rural America, and U.S. agriculture, says Tom Super, senior vice president of communications at the National Chicken Council in Washington, D.C. (USDA will buy up to $30 million in chicken products in this round of purchases.)
“But the real winners are financially-stressed families, food banks, disaster-relief operations, schools, and Americans needing food assistance, where these products are being distributed,” Super says. “The program also helps improve continuity in the supply chain by diverting some chicken products once destined for food service into other much-needed channels.”