CFAP 1 Payments to Sheep Industry Totaled $68.9 Million
Final numbers are trickling in for the first round of Coronavirus Food Assistance Program payments, which put $68.9 million back into the pockets of struggling American sheep producers as of Monday.
The American Sheep Industry Association projected $125 million in COVID-19-related losses at the farm gate level to the U.S. Department of Agriculture as it developed the CFAP program, and expects more than $100 million to be returned to the industry by the time the second round of CFAP payments wrap up in the months to come. The deadline to apply for the second round of CFAP payments is Dec. 11.
The first round of CFAP provided direct payments to farmers and ranchers to offset COVID-19 losses for livestock, dairy, specialty crop and non-specialty crop producers. Assistance was provided to those commodities that experienced a 5 percent or greater price decline from Jan. 15 to April 15. The CFAP 1 program was funded by the Coronavirus Aid, Relief, and Economic Security Act, which provided $9.5 billion in funding for producers impacted by COVID-19-driven market losses and Commodity Credit Corporation funding of $6.5 billion to compensate for losses due to on-going COVID-19 market disruptions.
CFAP 1 payments for lambs and yearlings, sheep and wool totaled $68.9 million. Of the payments made to sheep producers, most of the assistance (72 percent) was for lambs and yearlings less than 2 years of age at $49.8 million in CFAP 1 support. Sheep older than 2 years of age received $14.9 million or 22 percent of assistance made to the sheep industry. CFAP assistance for wool totaled $4.3 million, consisting of $2.7 million for non-graded and $1.6 million for graded. Of CFAP 1 commodities, payments for lambs and yearlings less than 2 years of age ranked 12th among all commodities. If lambs, yearlings and sheep were combined into one category (such as cattle), sheep payments would have ranked 10th.
On a state basis, the majority of total CFAP assistance went to sheep producers in Texas at $8.9 million followed by Colorado at $5.34 million, California at $5.31 million, Utah at $5.2 million and South Dakota at $4.4 million. The top 10 states received $45.1 million or 65 percent of total CFAP payments made to the sheep industry.
Of the payments made for lambs, yearlings and sheep, Texas received the most assistance at $8.7 million, followed by Colorado ($4.89 million), California ($4.86 million), Utah ($4.3 million), and South Dakota ($4.0 million). For lambs, yearlings and sheep assistance, the top 10 states accounted for $41.5 million or 64 percent of the total payments for sheep. These rankings aren’t surprising given these states are also the largest in terms of sheep and lamb numbers.
Utah producers received the most CFAP 1 financial assistance for total wool (graded and non-graded) at $942,722, followed by Colorado at $456,096, California at $449,347, Montana at $380,975 and South Dakota at $359,689.
Read more on the first round of CFAP payments in the December issue of the Sheep Industry News.
Katahdins Offer Free Sheep Buying Guide
Katahdin Hair Sheep International has published a Buyer’s Guide, and an online version is accessible to everyone.
While the publication stresses the importance of and the best ways to use the National Sheep Improvement Program’s Estimated Breeding Values, it also points out there’s more to selecting sheep than just the numbers.
“Several times in this magazine there is mention of the importance of also using your eyes to select for traits not measured by NSIP. Sound feet and legs, and correct mouth structure, should always be checked visually,” reads part of the magazine’s welcome statement. “Also, we would never suggest that every trait needs to be maximized. You should select for the traits that are important to you in a way that will help move your flock in the direction you desire.”
Click here to download the buyer’s guide.
USDA Issues Correction to Proposed ALB Rule
The U.S. Department of Agriculture’s Agricultural Marketing Service issued a correction on Monday to the proposed rule to amend the Lamb Promotion, Research and Information Order under the Commodity Promotion, Research and Information Act of 1996. The publication of the correction does not change the date that comments are due on the proposed rule.
The correction clarifies that the assessment remittance process described in Examples 1 and 2 are existing procedures that would change under the proposed rule. The current proposed rule incorrectly states that Example 1 would remain the same. AMS is also removing the first paragraph in Example 5 of the Supplementary Information section as it is duplicative.
The proposed rule was published in the Federal Register on Oct. 5. The public can provide comments on the proposed rule until Dec. 4, at Regulations.gov. For more information, contact Jason Julian, Agricultural Marketing Specialist, at 202-731-2149 or Jason.email@example.com.
The American Sheep Industry Association plans to submit comments on the proposed rule by the Dec. 4 deadline and welcomes input from producers. Thoughts on the proposed rule can be sent to ASI Executive Director Peter Orwick at firstname.lastname@example.org.
Since 1966, Congress has authorized industry-funded research and promotion boards to provide a framework for agricultural industries to pool resources and combine efforts to develop new markets, strengthen existing markets and conduct important research and promotion activities. AMS provides oversight to 21 boards. The oversight ensures fiscal accountability and program integrity and is paid for by industry assessments.
Trade Groups Seek Help from Defense Logistics Agency
The American Sheep Industry Association joined nearly a dozen textile organizations this week in urging the Defense Logistics Agency to shield military textile, apparel and footwear manufacturers from a one-month contracting model that makes it impossible for these industries to recover from supply chain and payment disruptions associated with the COVID-19 pandemic.
“We ask that DLA exercise its discretion to shield our industry from these obligation authority disruptions. While we understand that DLA is under pressure to extend this across all its business units, we believe there are compelling reasons why the textile, apparel, and footwear sector should be treated differently,” read the letter to newly appointed Vice Admiral Michelle Skubic.
“First, we are already treated differently as the contracting model for our industry is built on the Berry Amendment (10 U.S.C. §§2533a), a longstanding provision that requires the Defense Department to supply our troops with U.S.-made textiles, apparel and other sewn products, and footwear. This provision is premised on the fact that the United States cannot mount a credible national security posture if we do not have domestic access to the textiles and related materials that clothe and equip our warfighters. In recent years, those textiles have become increasingly sophisticated, enabling our troops a better ability to communicate, withstand attacks, mount offenses, shield themselves from the enemy, and heal wounds. Our ability to raise and deploy competitive forces around the world is directly related to the strength of the industry the Berry Amendment enables.
“As you can imagine, the Berry Amendment supports the employment of tens of thousands of Americans in manufacturing facilities throughout the United States and remains popular across a wide cross-section of Congress. It also enjoys broad support throughout the military, as the Berry Amendment ensures a steady supply of comfortable, high-quality uniforms and products as well as a capacity that allows this industrial base to surge in times of urgency. But the Berry Amendment can only be effective if there is consistent and predictable demand for the products our industry manufactures. Moreover, that demand needs to be carried out in a sustainable manner that enables companies to plan their production, order materials and train and retain their workforce. The entire supply chain – and indeed our long-standing partnership with DLA – is dependent on the Berry Amendment, coupled with an orderly contracting process.
“The current one-month order model punches a huge hole in that systematic contracting process. Moving to the one-month model effectively triples the cost and workload without increasing the revenue associated with a particular contract. Not only does this impede the ability of companies throughout the supply chain to stay in business, but the lack of certainty makes it harder to retain workers while disrupting the ability to maintain orderly production and delivery schedules, which decimate efficiencies.
“Second, unlike many of the other DLA industry partners, domestic clothing and footwear manufacturers have few options beyond the military. With import penetration in the commercial sector stubbornly stuck at about 98 percent, the opportunities to produce domestically-made clothing and footwear are limited outside the needs of the U.S. military. Numerous studies, including reviews commissioned by DLA and the Commerce department, have highlighted the very high dependence this sector has on military contracting and, as a result, the importance of smart management of this contractor base.”
Australian Market Salvages Small Improvement
The Australian wool market continued to perform erratically, with upward and downward price fluctuations experienced within the series for the second consecutive week. The overall price increases of the previous series encouraged more sellers to the market, pushing the national quantity up to 37,512 bales.
When the market opened in the Eastern centers on the first selling day, it was immediately apparent buyer sentiment had weakened. The result was a reduction in prices across all Merino microns and descriptions. The Northern and Southern Micron Price Guides lost between 17 and 56 cents for the day. The losses in the East pushed the AWEX Eastern Market Indicator down 33 cents for the day.
When news of these losses reached the West, it prompted many sellers to pull their wool from the market, resulting in 29 percent of the fleece being withdrawn prior to sale. The wool left in the Fremantle sale attracted strong support and, as a result, recorded minimal price movements. The Western MPGs ranged between a 4-cent loss and a 5-cent gain. The positive tone evident in the West at the end of the first day, carried into the second, with all three centers recording positive movements.
The MPGs across the country rose by 23 to 68 cents. On the back of these rises, the EMI recovered all of the previous day’s losses, adding 34 cents for the day. The EMI recorded an overall positive movement for the series, rising by 1 cent and closing the week at 1,189 Australian cents. Worth noting, due to strengthening of the Australian dollar, when viewed in USD terms, the weekly rise was more substantial. The EMI rose by 16 U.S. cents for the series, which equated to a 1.8 percent rise.
Next week’s national offering increases. There are currently 40,359 bales available to the trade in Sydney, Melbourne and Fremantle.
USDA: Apparel Trade Begins to Show COVID-19 Recovery
Recent apparel trade data (chapters 61 and 62 of HS code) reveal both the global impact of COVID-19 and signs of the sector’s recovery, according to the U.S. Department of Agriculture.
China’s recovery is faster than in any other countries. However, the speed of recovery in consumer demand is uncertain, and the impact of working remotely is not known.
“Consumer demand was impacted on multiple fronts – changing behavior, lockdown restrictions, and rapid unemployment which reduced discretionary income. Global apparel imports dropped dramatically in April and May, with U.S. imports for May down 55 percent from the previous year. European Union and United Kingdom imports were down over 40 percent, while Japan fell 30 percent in the same period,” wrote USDA’s Foreign Agricultural Service in its November 2020 report, Cotton: World Markets and Trade.
The decline in textile and garment exports was felt in all major markets, but not equally. Exports from Bangladesh and India fell by 85 and 90 percent respectively, while shipments from Pakistan, Turkey and the European Union witnessed 60-percent declines. Vietnam textile and garment exports fell roughly 30 percent, the USDA report said.
The impacts of COVID-19 hit both demand and supply at the same time. Lockdown restrictions slowed consumer spending while also halting cotton-related processing. Spinning mills’ operating rates in India, Pakistan and the United States fell more than 90 percent, while declines were slightly lower in China. Similar to the export data, Vietnam’s operating rate declined by only 30 percent.
Recovery in the spinning sector has also been uneven – COVID-19 first impacted China and coincided with the Chinese New Year holiday. China’s recovery is faster than in many other countries, with operating rates returning to near pre-COVID-19 levels in three to four months, with other countries’ rates are still below pre-COVID-19 levels after six months. While the rapid shutdown of spinning mills somewhat limited the buildup in yarn and fabric inventories, cotton stocks expanded rapidly.
“When COVID-19 emerged, most of the 2019-20 crop was harvested and the current year’s planting had begun. Expectations for 2020-21 world production have declined only slightly since February; however, global consumption is a different story. Comparing November’s global consumption to the February USDA Outlook, 2019-20 use is 17 million bales lower (14 percent) and the 2020-21 forecast is 7 million bales lower (6 percent). As a result, 2020-21 global cotton ending stocks are now forecast 22 million bales higher (22 percent) than at the Outlook Forum,” the report said.
However, the speed of recovery in consumer demand is uncertain, since recent apparel imports include deferred demand as consumers made purchases that were initially delayed. Moreover, some demand that was lost, such as school uniforms, 2020 summer and vacation clothing, hotel use of cotton bed sheets and towels, and other seasonal clothing items, may never be recovered. Further, the long-term impacts of remote work on workplace and school attire purchases remain unknown, the USDA said.
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