KLA Urges Secretary Perdue To Raise Payment Limit

Courtesy of kla.org

KLA President Harry Moser yesterday sent a letter on behalf of the association to USDA Secretary of Agriculture Sonny Perdue requesting an increase in the payment limit included in the Coronavirus Food Assistance Program (CFAP) that was passed last week. While many details of CFAP have yet to be released, indications are the livestock industry will receive a total of $9.6 billion in direct payments to be divided among the cattle, dairy and hog industries. The breakdown would be $5.1 billion for cattle, $2.9 billion for dairy and $1.6 billion for the hog industry, with payment limitations of $125,000 per commodity and $250,000 per producer. Moser expressed KLA’s extreme concern that this payment limit would only represent a small percentage of losses by many livestock producers.

The letter highlighted a recent study conducted on behalf of NCBA that showed market losses of $13.6 billion for cattle producers. Broken down by segment, losses were estimated at $247.15 per head for cow-calf producers, $159.98 per head for stocker operators and $205.96 per head for cattle feeders. Moser explained the association anticipates the payment limit will impact many stocker operators and most cattle feeders in the state, writing “At these levels, a feedyard with 606 head of feeder cattle will hit the payment limit cap of $125,000. This size of a feedyard is not even counted for purposes of mandatory price reporting and represents a small portion of Kansas cattle feeders.” In addition, he noted that for dairy farmers KLA has estimated a 300-cow dairy likely will be impacted by the payment limit. For most KLA dairy members, the limit would represent less than 10% of their estimated losses.

Moser reminded Perdue that the Coronavirus Aid, Relief and Economic Security Act, which is funding CFAP, did not place a payment limit on the $9.5 billion appropriated for the livestock industry and urged the secretary to increase the limit to more appropriately reflect the losses experienced by all sectors of the cattle and dairy industry. The complete letter can be viewed here.
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