ASI Responds to COVID-19
Since the advent of this global pandemic, livestock markets have crashed, foodservice slowed to less than a trickle – which led to the sheep industry’s second largest packer declaring bankruptcy – and all this has sheep producers looking for some relief and certainty.
While the response has not been as quick as many had hoped, the American Sheep Industry Association and its state affiliates are working to urge temporary and long-term relief for an industry first hard hit by the trade disruption with China and then bashed against the rocks along with the larger economy.
Coming off a successful Spring Trip to Washington, D.C., federal agency offices and the U.S. Capitol were closed. The sheep industry was essentially the last agriculture industry fly-in of the winter. The Monday after our return, businesses across the country shut down in response to stopping the spread of a novel disease. As Congress debated a relief package, ASI was there urging House and Senate leadership of both parties to raise the limit on the Commodity Credit Corporation and replenish those funds so USDA could offer relief. And Congress acted with $14 billion to replenish the CCC and $9.5 billion in aid for livestock – a sector largely untouched in prior rounds of the Market Facilitation Program. Concurrently, ASI joined with the National Lamb Feeders Association to urge the Agricultural Marketing Service to purchase lamb through the $17 million lamb buy announced last summer.
Immediately following Congressional passage of the CARES Act, ASI sent a letter to the U.S. Department of Agriculture urging temporary relief for sheep producers in the face of what had by then grown to an estimated $125 million farm level loss. The situation on the ground was far beyond challenging as losses mounted for all sectors of the industry. ASI’s Legislative Council held a call and urged producers to reach out to their members of Congress.
ASI President Benny Cox said that the association followed that letter with analysis that updates the damage figure industry wide to $350 million and specifically notes the loss of key mandatory lamb price reports and therefore the Livestock Risk Protection insurance program for lamb. “The LRP-Lamb program is dependent on market reporting data and absent that data, the only risk protection tool for our industry could not be offered,” Cox said.
This has compounded ASI’s ask for relief for the wool and pelt market hit hard by the cessation of trade with China due to retaliatory tariffs and plummeting wool prices due to worldwide cancelled wool chain contracts from raw wool to fabrics due to the COVID-19 crisis. Wool export value is off 88 percent, and pelt prices are down 76 percent since the trade disruption started. In addition to a continued request for wool assistance under the MFP, ASI leadership has continued to work with USDA to gear up the Wool Loan Deficiency Program to respond to this wreck in the American wool market.
To avoid interruption of spring shearing in the United States, ASI has provided critical industry documents to shearers for their use when traveling to shear sheep.
As Congress looks to negotiate a future COVID response, ASI also sent a letter to Senate leadership requesting the inclusion of H-2A guest herder wages in Paycheck Protection Program eligibility. Unfortunately, the program guidelines released by the Small Business Administration based wage eligibility on the principal place of residence being the United States. In response to sheep grower’s concerns, ASI is urging that the PPP include H-2A wages to offer meaningful relief for this critical segment of our industry.
The association has also continued to work across agencies to ensure regulatory relief wherever it could in response to the issues raised. The U.S. Forest Service and the Bureau of Land Management have issued updated guidance for turnout with limited personal interaction. The Department of Transportation has removed hinderances to transporting critical needs, such as agricultural products. And the Department of Labor has engaged to offer flexibility under the guest worker programs.
ASI participated in a conversation this week with the team at USDA that is designing new assistance under the livestock stimulus and Market Facilitation Program and each sector from lamb feeding to sheep producer to processor relayed the damage already incurred as well as that expected for the 2020 lamb crop and wool clip. USDA was urged to target the $350 million in damages with equitable assistance to sheep industry operations. An additional call to action was issued on April 10 with the likely final push to include the industry in the relief.
Click Here for more COVID-19 response information.
Wool LDP Now Available
As the wool market struggles during the current worldwide pandemic, now might be a good time for wool producers to look into the Farm Service Agency’s Wool Loan Deficiency Payment Program.
Just this week, LDP payments were available for fine wool (finer than 18.6 micron), as well as coarse wool (ranging from 26 micron and up). Payment rates change weekly, but wool finer than 18.6 micron was eligible for a 35 cent per pound payment this week. Wool from 26 to 28.9 micron was eligible for a 23 cent per pound payment and wool 29 micron and coarser was eligible for a 24 cent per pound payment.
“Wools have been going into storage so we understand there is now an interest in the loan function of this program and we met with USDA’s Farm Service Agency to share the latest information plus review options for loans with or without objective measurement tests,” said ASI Executive Director Peter Orwick. “It has been more than a decade since loans or the deficiency payments were used widely, so it is a good idea that the agency coordinate information across its offices and with sheep producers. We must work together to maximize use of this program. It is imperative that the entire wool industry – from buyers to warehouses to producers – share prices of wool sold to USDA’s Agricultural Marketing Service.”
Producers with questions about the Wool LDP Program should contact their local FSA office.
Click Here for more information.
SheepCast Looks at Lamb Market
In this special edition of the ASI SheepCast, Texas A&M Professor and Extension Economist Dr. David Anderson provides an outlook on the current lamb market.
Click Here to listen to the podcast.
Maturity Dates for Marketing Assistance Loans Extended
Agricultural producers now have more time to repay Marketing Assistance Loans as part of the U.S. Department of Agriculture’s implementation of the Coronavirus Aid, Relief and Economic Security Act of 2020. The loans now mature at 12 months rather than nine, and this flexibility is available for most commodities – including unshorn pelts and wool (graded and non-graded).
“Spring is the season when most producers have the biggest need for capital, and many may have or are considering putting commodities under loan. Extending the commodity loan maturity affords farmers more time to market their commodity and repay their loan at a later time,” said U.S. Secretary of Agriculture Sonny Perdue. “We are extremely pleased that USDA can offer these marketing flexibilities at this critical time for the agriculture industry and the nation.”
Effective immediately, producers of eligible commodities now have up to 12 months to repay their commodity loans. The maturity extension applies to nonrecourse loans for crop years 2018, 2019 and 2020. Eligible open loans must in good standing with a maturity date of March 31, 2020, or later or new crop year (2019 or 2020) loans requested by Sep. 30, 2020. All new loans requested by Sept. 30, 2020, will have a maturity date 12 months following the date of approval.
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Cloverdale Ram Sale Moves Online
Due to the COVID-19 pandemic, the Cloverdale Ram Sale will be held online.
Buyers will be able to preview rams (60 head) and ewes (17 head) on April 27. Preview will be available until bidding begins on Friday, May 1, at 8 a.m. (PST) and closes on Saturday, May 2, at 3 p.m. (PST). Rams and ewes will be vet checked and held to Cloverdale Ram Sale health and quality standards.
“These are challenging and changing times,” organizers wrote in a press release. “The ram sale committee will miss seeing consigners, buyers and all of the folks who make up the Cloverdale Ram Sale community. In light of current conditions, we want to take extra steps to keep everyone safe.
“We are thankful and excited to have the opportunity to work with Susan Taylor Show Services to move the Cloverdale Ram Sale forward and still provide an opportunity for consigners and buyers to sell and purchase quality rams. Sale manager, Susan Taylor, can walk buyers through the registration and bidding process. Buyers can contact Taylor at 530-966-1975 or email@example.com, where she can provide easy to follow directions for the online bidding process.”
Click Here for more information.
Australian Wool Market Ticks Upward
The Australian wool market showed signs of improvement in this series, recording overall increases in all merino fleece types. Brokers actively encouraged only genuine sellers to enter the market, resulting in 22 percent of the offering being withdrawn prior to sale.
This action had a two-fold effect. First, it reduced the overall offering and increased demand on the remaining lots. Second, it increased buyer confidence as they realized the wool still in the sale was more likely to be sold. The result was price increases across the country. The individual Micron Price Guides rose by 4 to 70 cents, pushing the AWEX Eastern Market Indicator up by 14 cents for the week as it closed at 1,301 Australian cents.
An event of note this week was the inaugural Online Open-Cry auction, using video conferencing tool Zoom and held in Sydney on the second day of selling. The initiative was suggested by the industry COVID-19 working group in an effort to work toward contingency options as COVID-19 restrictions escalate. AWEX – working together with industry – trialed OOC auctions with great success, so much so that a decision was made to sell 61 lots before the start of the traditional Sydney auction. Two brokers offered wool under this new platform, which was well supported by buyers. This initiative was well received by all participants and provides an option to continue selling should the physical auction rooms be closed.
Next week was originally scheduled for a one-week Easter recess, however a decision was made by the National Auction Selling Committee to roster a sale to provide another selling opportunity for growers. The national offering reduces to 21,523 bales. Due to the small number of lots, only one-day sales are required.
Video of the Week
California sheep producers Ryan Mahoney and Dan Macon have started a new YouTube series entitled Sheep Stuff Ewe Should Know. Episode one contains information prospective producers should consider before jumping into the industry.
Click Here to watch the video.
- PRODUCER EDUCATION