Economic Impacts/Stimulus

CARES Act Direct Payment Information

A helpful FAQ document on direct payments from Congresswoman Lauren Underwood’s office.

Health Insurance Options for Farm Families

Many farm families rely on off-farm jobs for health insurance, and the sudden layoffs and furloughs might mean that farm families are losing their coverage unexpectedly. Other families, who have not had insurance, might be looking to purchase a plan in these uncertain times. Health insurance marketplaces and eligibility criteria for public coverage vary from one state to another, but a search for coverage could start by contacting an insurance agent, or checking your state’s health insurance exchange https://www.healthcare.gov/. “Loss of job-based health insurance coverage is a qualifying event to purchase coverage outside of the open enrollment period and this can be a cheaper alternative to paying for continuation of employer-based health coverage through COBRA,” said Florence Becot, Ph.D., a rural sociologist and associate scientist with the National Farm Medicine Center, Marshfield Clinic Research Institute, Marshfield, Wis.

Market Considerations

Three factors have contributed to the decline in corn, soybeans, and wheat price declines since mid-January that happened to coincide with the COVID-19 pandemic and need to be taken into account.

1. The increase in the value of the U.S. dollar compared to our competing countries: the value of the Brazilian Real depreciated by nearly 10% and the Argentinean Peso by 6% against the USD since mid-January. This makes their soybeans and corn cheaper on the world market compared to ours.

2. Brazil’s record soybean harvest, combined with their devalued currency, which has resulted in larger Brazil exports and a lower world price.

3. The China Purchase Agreement was being delayed even before, or regardless, of the spreading of COVID-19 to Europe, Latin America, and North America.

The true impact of COVID-19 in terms of food consumption is ultimately a widespread income effect of lost wages and hence loss in disposable income. Demand for fresh fluid milk and artisan cheeses is particularly sensitive to decreases in per capita income, and then to a lesser extent the meat sector as well (as evidenced in the graph below). However, the extreme fall in cattle and hog prices seems to be caused more by sheer uncertainty over the impact of retail sales and the potential risk of slaughter plants being temporarily shuttered, rather than any truly predictable fall in demand.

The combination of all four of these factors is shown in the graph below, of the cumulative percentage decline in seven commodity prices since mid-January and the acceleration of those declines in late February, as the COVID-19 pandemic stoked fear in all markets of a general economic recession.

Source: AFBF

 

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