Labor Seen as Growing Problem

OMAHA (DTN) -- Even as the president of the American Farm Bureau Federation was on a conference call talking about the importance of ensuring H-2A workers continue getting visas, the U.S. State Department on Wednesday halted processing of all routine visas in most countries around the world.

The visa move could make the labor market for farm labor even tighter than the complications producers have already faced in recent years, noted Zippy Duvall, president of the American Farm Bureau Federation.

"Right now, this is one problem we have got to fix, or four to six months down the road, everyone will feel the pain of what could happen if we don't get the workers here to get it done," Duvall said, citing the chronic debate over immigration. "This is a problem we have got to fix."

The COVID-19 pandemic has wrecked markets, daily business and community life, but farm groups are also stressing reaction to the pandemic could disrupt food production in the coming months if guest workers are shut out of the country.

Asked repeatedly Wednesday about assessing economic damages for farmers and possible direct aid, Duvall said the group wants to ensure farmers can continue to plant crops and deliver commodities where needed.

"Our focus is on making sure we solve the problems that may affect agriculture as far as the production rather than the damage that's being done, and I'm sure we're going to get to those conversations, and I'm sure the economists are already working the numbers," Duvall said. He added, "Our main focus is on what they are facing today, and labor is the biggest thing."

Most farm groups collectively right now have not organized a specific request to Congress for a stimulus package. Yet, in response to requests from the U.S. Cattlemen's Association and others for aid to livestock producers, Sen. Mike Rounds, R-S.D., on Wednesday introduced a bill to provide a specific payment to cattle producers due to losses from COVID-19.

The bill details that USDA would pay cattle producers for feeder cattle sold in 2020 if the average national price falls below $150 per cwt, or in the case of live cattle, if the average national price falls below $121 per cwt. The payment amount would be the difference between those prices and the average price sold for the feeders or live cattle in those months.

Dale Moore, AFBF's executive vice president, acknowledged some type of aid comparable to the Market Facilitation Program will likely be created, citing the three tranches of payments made under last year's program.

"I have a feeling it won't be too long before we're talking about a fourth or a fifth tranche depending how long it takes this virus to work its way out of the economy," Moore said.

John Newton, AFBF's chief economist, pointed to analysis by JP Morgan on Wednesday that slashed U.S. GDP 14% for the next quarter of the year and would likely shrink the U.S. economy 1.5% for all of 2020.

"Measuring the financial impact on agriculture is something we will be doing, but that, by nature, is going to have to be an ex-post analysis," Newton said.

Live cattle prices for the April contract have fallen 28% since mid-January, while Class IV milk is down 26% and live hogs are down 20%, Newton noted.

"A lot of different sectors of agriculture have seen their prices fall very sharply," he said.

Agricultural groups have contacted USDA and the Commodity Futures Trading Commission to monitor the market transactions.

On labor, the State Department posted an alert on its website that U.S. Citizenship and Immigration Services would suspend all routine in-person services until at least April 1 "to help slow the spread" of COVID-19. Staff will continue work that does not involve contact with the public, but those USCIS offices "will provide emergency services for limited situations."

Roughly 90% of H-2A workers come from Mexico, but that would still mean roughly 26,000 guest workers come countries, including South Africa, Peru, Guatemala and Jamaica. Those visa applications may be at risk, but the workers also likely were already challenged getting to the U.S. because of situations such as flight cancellations, said Allison Crittenden, director of congressional relations for AFBF.

"This will further limit those workers coming from other countries, but the bulk of them do come from Mexico," Crittenden said.

Initially, the State Department had announced earlier in the week it was shutting down its visa applications from Mexico. The U.S. Consulate in Monterrey, Mexico, then stated that veteran H-2A workers who were returning to the U.S. could get their applications processed because they do not require new interviews for their applications to be approved.

Agriculture Secretary Sonny Perdue personally intervened with the State Department on the H-2A situation. That led at least some groups such as the United Fresh Produce Association to credit Perdue for stepping in.

"Thanks to some quick work by the White House and USDA, Secretary Perdue was able to get some special waivers that is helping accelerate that process. There is more work to be done, but this was a good step," stated an email from Tom Stenzel, president and CEO of United Fresh Produce Association.

The North Carolina Growers Association, the single-largest user of H-2A guest workers, also thanked the Trump administration for the reversal. Workers help farmers in that group plant and harvest more than 50 different crops in North Carolina.

Still, Duvall said the reprieve by the Monterey Consulate doesn't cover all of the farmer needs.

"We don't know how many workers that is, though," Duvall said.

In 2019, H-2A nationally included 257,667 workers under the program. The top five states for using H-2A are Florida, Georgia, Washington, California and North Carolina.

Farmers are about to hit peak season for H-2A workers when demand ramps up. Roughly one-third of workers come into the country right at the beginning of spring.

A broader group of farm groups, the Agriculture Workforce Coalition, called on Secretary of State Mike Pompeo to continue processing H-2A visas at consulates and also to "treat all agricultural appointments as emergency visa services."

Similar questions about guest workers were also being raised by farm groups in Canada as that nation also closes its borders as well.

CATTLE MARKET CHALLENGES

After Sen. Rounds' bill was introduced, the U.S. Cattlemen's Association called on its members to get their senators and representatives to sign onto the measure as soon as possible.

Earlier, Ethan Lane, vice president of government affairs for the National Cattlemen's Beef Association, said in a call with reporters that his organization has been working almost exclusively on the impacts of the coronavirus to cattle producers right now.

Lane cited the complaints over the declining live cattle prices and the spread with boxed beef. Lane said NCBA has pressed packers to aggressively bid cattle in the cash market.

"We're seeing a lot of pictures on the news of cleaned-out store shelves. We know this is a commodity in high demand at the moment, and the prices we are seeing on the board in the live cattle side are not reflective of that," Lane said. "So that is an issue we are continuing to monitor."

Later Wednesday, the Ranchers-Cattlemen's Action Legal Fund United Stockgrowers of America called for "emergency stopgap measures" that included a request for emergency loan extensions to producers, provide capital gains relief on sales of land, cattle and equipment, and eliminate red tape that prevents state-inspected beef plants from selling across state lines "to increase competition for cattle and eliminate the current bottleneck in beef distribution to consumers."

R CALF-USA also wants to suspend beef imports from Brazil, but the group also called for the Department of Justice "to immediately investigate the cause of this week's inexplicable market volatility marked by severely depressed cattle prices and skyrocketing wholesale beef prices."

Lane said NCBA also wants to keep sale auctions open and excluded from state mandates reducing crowd sizes. A DTN scan of auctions over the past week showed most auctions nationally have continued, though a few in Midwest states such as Iowa and Nebraska were canceled over the past week.

NCBA also wants to ensure livestock producers can take part in any congressional aid package that would include low-interest loans to small businesses as well.

Both NCBA and AFBF also had requested that the Department of Transportation provide some clarity on ensuring that the waiver on hours of service be expanded for the full agricultural supply chain. Different states also have waived weight limits on trucks for grocery and commodity deliveries as well.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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