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Montana Ag Network (Monday June 1)

Posted at 10:27 AM, Jun 02, 2020
and last updated 2020-06-02 14:33:33-04

#1 As farmers and ranchers work with their local Farm Service Agency offices to apply for the Coronavirus Food Assistance Program (CFAP), as of right now, seed potato farmers in Montana and across the country cannot apply, as they were left out of the program.

With Montana one of the top seed potato producing states, this could have a huge economic impact on the sector.

The National Potato Council (NPC) CEO Kam Quarles said his group is working with USDA to see seed potatoes included in the funding package.

“Seed potatoes are the tip of the spear for every single crop that the potato industry has.,” Quarles explained. “If we don't have seed potatoes, we don't have a crop. Also, the difference between seed potatoes and potatoes that you see in your grocery store, is other than purpose, they are potatoes so they should not be considered differently in the CFAP program.”

The NPC has been working with USDA to make sure that seed potato producers are included in the CFAP funding.

“I think that there has just been some confusion with FSA and some of the offices,” said Quarles. “We're working closely with USDA and I think they sincerely want to get these things right. “I don't see any impediment that we would have to wait for another stimulus bill or an amended rulemaking to make seed potatoes eligible. So, we're pushing pretty hard. I'm cautiously optimistic that USDA is going to make a change here to make sure that these growers aren't left out.”

The NPC also stated that the CFAP program doesn’t meet the needs of the potato industry that currently do qualify for funding. In addition, with 60% of potatoes grown in the U.S. destined for food service customers, COVID19 has created an oversupply of 1.5 billion pounds of potatoes. NPC is working with Congress and USDA to find solutions to resolving the oversupply and not letting potatoes go to waste.

#2 Feeder Cattle demand continues to increase. CattleFax reports the backlog of feeder cattle is paralleling fed cattle.

As fed slaughter gains ground and feedyard pens empty, feeder cattle demand will increase. What does this mean to price? The market is currently allowing near a $25/cwt feeder-fed spread. Meaning the Feeder Index is roughly $25/cwt above the futures month they are placed against the fed market.

CattleFax added that The difficulty for cattle feeders is gauging where the basis will be when they get there. Bottom line is, feeder cattle will likely trade from $130 to $140 through the summer months. Deferred live cattle will need to exceed $115 to move above these levels.

#3 USDA has released its agricultural price report, compiling data on the average price producers where paid in April 2020 compared to April 2019. Producers that sold barley this April received $3.95 compared to $4.66 a bushel a year ago.

Alfalfa hay was down $20 a ton from April 2019, to $130/ton in April 2020, while the other Hay category only saw a $5 dip from 2019, to $130 ton in April. No doubt that COVID-19 played a role in some those price reductions.