COVID-19 and China have consistently made headlines this year in agriculture.
The ink was barely dry on the phase one deal the United States struck with China when the global pandemic set in, leaving many doubting China would meet its $36.5 billion purchase commitment in the first year. However, the two parties held a six-month review on Aug. 25 and acknowledged progress was being made.
U.S. Secretary of Agriculture Sonny Perdue told Agweek that he was encouraged by the discussion between U.S. Trade Representative Robert Lighthizer and Chinese trade officials but believes China will have to step up purchases in the fourth quarter.
“The numbers do look really good," Perdue said. "I know they were slow off the gun. COVID came in and Brazil’s harvest was upon us, but the last four to six weeks it looks like they have really stepped up their game with cereals, corn as well as soybean purchases. They really have to keep the pedal to the metal to make their commitments, but we’re hopeful.”
Perdue added that after complaints from farmers across the country, the department will be changing the formula for figuring the direct payments and adding more commodities.
“As you know, 'CFAP One,' we had to cut it off on April 15 to get money out the door quickly. We did that, but some of the cattle guys had this cliff of April 15 and there was concern,” he said.
However, he believes producers will be happy when they see what USDA is recommending in CFAP Two.
Perdue was doubtful that the ethanol industry would be included in the CFAP Two program.
“The processing industry is large, deep, wide and frankly, I don’t know that we would have enough money to include them. You know, where do you draw the line in the overall processing industry?” he said.
He said it is hard to define, and if USDA includes ethanol, it also would need to consider other food and meat processors.
“Right now, unless Congress helps me to define that, I don’t know how we would include the processors in that," he said. "Although there is a lot of demand in Congress for that.”
Congress also went on recess without passing another round of COVID relief. The House bill, HEROES, allocates nearly $33 billion for agriculture, with the Senate’s HEALS Act at around $20 billion. Perdue says they hope for a compromise in the middle and have talked to leadership in both chambers about the projected needs.
“We’ve estimated that the remaining needs potentially for some of the livestock people that may have had depopulation efforts, and another $25 billion would cover it,” he said.
During COVID, the cattle market also melted down while boxed beef prices soared to record levels, causing many cattle producers to cry foul and ask for an investigation. USDA started an investigation and made some recommendations to Congress but ultimately turned the probe over to the Department of Justice. Perdue said they did not find any illegal activities but that isn’t to say that DOJ will not.
“We have not seen any smoking gun evidence at this point ... but we don’t have all the investigatory powers that the DOJ does have. We think these companies, obviously it’s a function of being very much consolidated in the industry. Some of the rules that drove smaller processors out we also need to look at,” he said.
Perdue said he’s been frustrated since the Holcomb, Kan., plant fire in August 2019, a frustration that has continued as COVID made prices diverge between retail meats and wholesale or live animal meat.
“And we’re still looking for the answers there,” he said. In fact, they have a team of economists studying the phenomenon.
When asked if he would continue as secretary for another four years if President Donald Trump gets reelected, Perdue said he loved the position and the constituents he served and would be honored to continue to work for the administration.