Claims for US agricultural debt, credit relief increases with the spread of the coronavirus

CHICAGO (Reuters) – U.S. cattle producers urge the Department of Agriculture to postpone or adjust payments on government loans as coronavirus hits already ailing agriculture, the largest U.S. agriculture group said.

The American Farm Bureau Federation’s request was made in a March 17 letter that set out a wide range of concerns, ranging from access to farm labor to concerns in the supply chain of the fast-spreading virus. Many US economic sectors have sought help from the federal government.

“Farm Service Agency (USDA) loan payments are now due for many ranchers,” said Zippy Duvall, president of the Farm Bureau, in the letter. “Can the USDA consider temporary relief (such as a deferment or loan adjustment) to help producers respond to the pandemic’s impact on normal marketing and prices?”

A cattle group also asked Perdue for a coronavirus bailout, using the same pool of funds the Trump administration tapped for nearly $ 30 billion in aid related to the U.S.-China trade war.

“In short, resources and programs are needed to ensure that

Remedial action will be taken immediately to ranchers and cattle feeders who are experiencing excessive price drops, ”stated the March 16 letter from the United States Cattlemen’s Association to Perdue, which was also sent to members of Congress.

April Live Cattle Futures LCJ0 are down 12% on the Chicago Mercantile Exchange this month and are down 25% year-to-date.

Efforts to get debt relief to farmers have increased this week as the fast-spreading virus triggers emergency lockdowns and cash injections not seen since World War II.

Late Monday, the Farm Credit Administration (FCA) announced that lenders in the state-sponsored Farm Credit System (FCS) should begin working with agricultural borrowers, including potentially rescheduling debt for those whose operations are affected by the coronavirus.

Lenders can extend loan repayment terms or simplify new loan documentation requirements for certain borrowers, Glen Smith, chairman of the national regulator for Farm Credit’s lenders, said in a statement.

System regulations give lenders “significant flexibility to help borrowers affected by COVID-19” and the coronavirus outbreak, Smith said.

The FCS system is a leading source of funding for U.S. farmers, accounting for more than 36% of the nearly $ 402 billion in U.S. farmers debt in 2018, according to the latest USDA data.