More farmers declare bankruptcy despite record levels of federal aid
- The U.S. is seeing more farmers file for bankruptcy even though federal payments are projected to reach record levels this year to counteract the slump in the agricultural economy caused by the coronavirus pandemic.
- Approximately 580 farmers filed for chapter 12-bankruptcy protection in the 12-month period ending June 30th, according to federal data.
- This number is 8% more than year-ago levels.
- The Trump administration is expected to pay out a record $33 billion in payments to farmers this year, according to the University of Missouri’s Food and Agricultural Policy Research Institute.
- These government payments will make up 36% of farm income this year, the highest share in almost two decades.
- Paul Swanson, an Oshkosh, WS based attorney has 40 open farm-bankruptcy cases, about a third more than last year. He has clients that received federal coronavirus aid but still wound up in bankruptcy.
- He feels that agricultural markets were poor before the pandemic, and the pandemic just intensified the situation.
- According to the National Pork Producers Council, hog farmers have lost nearly $5 billion in actual and potential profits for 2020.
- S. farm debt has grown steadily since 2006 when a commodity boom encouraged farmers to borrow heavily. According to the USDA, farm debt is up to $425 billion this year. The largest sum since the farm crisis of the 1980s.
- Agricultural economists say more farms could end up in bankruptcy next year without additional aid. If more aid isn’t extended, farm income is slated to fall 12% in 2021.
Conversion of Greeley lamb plant paused for 30 days
- According to Cameron Bruett, Head of Corporate Affairs for JBS and Pilgrim’s Pride, JBS officially acquired the Mountain States Rosen lamb processing plant last week.
- Due to interest in the transaction, JBS has agreed to not make any material changes to the facility for 30 days as a sign of good faith. During that time the DOJ will have the chance to look into any concerns that have been raised. JBS welcomes their review.
- Bruett also added that last week JBS offered to lease back the facility to the former owners for 90 days to ensure stability for local producers. The company was informed that such actions weren’t necessary, as a new lamb processing facility will be opening in the region this fall.
Boxed beef prices
- Choice boxed beef: $204.66 (+1.09)
- Select boxed beef: $192.01 (+1.19)