Ag relief in Heroes Act draws mixed response

The colossal $3 trillion stimulus bill that passed in the Democrat-controlled US House of Representatives on 15 May is drawing mixed responses from agricultural interests.

The bill, widely referred to as the Heroes Act, earmarks an additional $16.5bn of direct payments to agriculture producers and provides added flexibility to existing funding distributed by the Commodity Credit Corporation.

The Heroes Act is the latest effort to provide financial aid to the US agricultural industry. More than $30bn in coronavirus aid has been designated since late March, with an additional $50bn proposed in a separate bipartisan House bill that has sat in committee since late April.

The bill has little chance of passing the Senate because of Republican opposition. House Agricultural Committee ranking member Michael Conaway (R-Texas) on 15 May condemned the legislation, adding that a bipartisan effort would "provide $68 billion in funding to give [the US Department of Agriculture] the tools it needs to ensure our food supply remains safe, abundant and affordable".

"The House Democrat's proposal on agriculture is just too little and threatens to become too late unless Democrats start seeking bipartisan, common sense solutions to address the economic impacts of Covid-19," Conaway said in a statement.

But industry advocacy groups National Farmers Union (NFU) and National Corn Growers Association (NCGA) have lauded the measure as it aims to curb further economic unrest stemming from the Covid-19 pandemic.

Both groups said on 15 May the $16.5bn will help mitigate immediate financial stress to the industry, but NFU president Rob Larew urged for longer-term support addressing "significant, underlying flaws in our food system".

Corn growers have been specifically exposed after gasoline and ethanol demand evaporated following national- and state-led stay-at-home mandates. The bust in the US energy markets tanked corn prices, while the spread of coronavirus has forced many meatpacking facilities to idle operations.

A growing share of farmers are increasingly concerned about profitability this season and plan to seek federal financial relief, according to Purdue University's recent monthly Ag Economy Barometer.

Corn prices have slightly rebounded as stay-at-home measures are lifted, enabling increased ethanol production from decade-lows, although output remains at just 40pc of January volumes. Front-month corn futures peaked last week at $3.23/bushel, a 7pc jump from the 11-year low on 28 April.

By Connor Hyde