Feds To Bulk Up Food Bank Inventories As Part Of The Ag Bailout

Dec 20, 2018

On top of a second round of payments to farmers as part of the U.S. Department of Agriculture’s trade relief program, the agency is trying to ease the impact by purchasing surplus food and distributing it to food banks and other hunger relief groups.

The USDA announced in July it would borrow up to $12 billion dollars through a Depression-era program to counteract Chinese and other countries’ tariffs on American farm products. In recent weeks, China has resumed buying soybeans, but the uncertain situation has made it hard for farmers.

“It’s kind of hard to plan when you’re really unsure of how great your loss was gonna be this year,” said Robert Johnston, who farms in Clearwater, Nebraska. “Profitability is kind of a stretch of the imagination.”

Johnston estimates the relief payments will cover about half of the potential earnings he lost when Chinese tariffs took effect and soybean prices plummeted. The first payment, announced in September, covered half of farmers’ production in 2018. The second, and final, payment announced this week will cover the rest.

“While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations,” Agriculture Secretary Sonny Perdue said in a statement. “This assistance will help with short-term cash flow issues as we move into the new year.”

The breakdown of payments includes $7.3 billion for soybean producers, but a fraction of that for other commodities such as corn ($192 million), cotton ($554 million), and wheat ($238 million).

The food left behind

Another $1.2 billion is earmarked to buy surplus supplies of food that will be shipped to food banks.

Some purchases that were scheduled to begin shipment this month include 255,000 cases of walnuts, 220,000 cases of cranberry juice, nearly 600,000 cases of oranges and 5 million pounds of pulled pork.

Pork is one of the industries the most affected by Chinese tariffs, and it’s the biggest item on the USDA’s purchase list at $558.8 million.

But one of the most coveted food items by Scott Young, executive director of the Food Bank of Lincoln in Nebraska, is fresh produce.

“The more produce we can add to the food we distribute the better,” Young said. “It’s healthier. It’s not as accessible to low-income people.”

Young says the food shipments from the trade relief program are free. Rather than take the opportunity to hold back on purchasing food, though, his organization plans to find room on shelves and in freezers and get it to people who can use it as soon as possible.  

“We will distribute this food in addition to the food we’ve already got budgeted,” Young said. “It’s icing on the cake for the Food Bank of Lincoln.”

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