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Ag commissioner concerned about collapsing cattle prices

Brandon Moseley

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Alabama Department of Agriculture and Industries Commissioner Rick Pate (R) is concerned about dropping cattle prices and the impact that that is having on Alabama’s farmers and ranchers.

“We have been very dialed into the crisis Alabama Cattle Producers are up against,” Pate told the Alabama Political Reporter. “We will continue to closely monitor this dire situation and the market impact it is having on Alabama’s cattle farmers . . . as well as consumers.”

“After I was contacted by a number of Alabama’s stockyards and Cattle producers expressing concern with regards to market inconsistencies and increased consumer prices…… I wrote a letter to Senators Shelby and Jones requesting that they join in on a push for an investigation of the meat packing industry,” Pate said. “I am encouraged by the support we are getting from both Jones and Shelby. It’s also great to see Alabama Producers joining in together in an effort to formulate a strategy to address the current situation.”

Commissioner Pate shared the April 6 letter.

“Over the last five days, I have been contacted by many stockyards and cattle producers concerning the seemingly inconsistent drastic reduction in futures prices for cattle while at the same time consumers are purchasing more beef at grocery stores than at any time in recent memory and at the same time grocery store shelves are empty of beef,” Pate wrote the Senators. “There is concern from many in the cattle industry that the large meat packing companies are manipulating markets to put cattle produces and local stockyards at a disadvantage during a national crisis. Due to depressed cattle prices and uncertainty over cattle prices multiple stockyards will not conduct business this week.”

“I understands that Senators Chuck Grassley of Iowa and Mike Rounds of South Dakota have recently asked the U.S. Department of Justice and other federal agencies to investigate whether the large packing companies are manipulating beef markets to fix prices at a level that negatively impacts beef producers,” Pate wrote. “I urge you to join your fellow senators in calling for this investigation to make certain that Alabama cattle producers are not suffering from artificially low beef prices.”

COVID-19 has impacted many areas of our lives. That includes at the grocery store where selection of beef, pork, and chicken products can be a hit and miss proposition for shoppers due to hoarders and to less cattle, hogs, and chicken being killed because of slaughterhouses suffering high absenteeism due to COVID-19. The big four major packers: Tyson Foods, Cargill/Excel, J.B.S. Swift, and National Beef process over 80 percent of the cattle. When their daily productions dropped there was an oversized effect on cash and futures markets, because of the lack of competition and because 70 percent of the cattle they process are forward contracted. If a feedlot was not forward contracted they often could not sell their cattle at any price.

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The spot market or cash market generally determines live cattle prices. Some in the industry have accused the big four meatpackers of engaging in an “allied strategy” to manipulate the spot market so that the four major companies can profit at the expense of farmers and ranchers.

Sen. Grassley praised President Donald J. Trump’s recent call for an investigation into possible anticompetitive behavior in the beef industry. Last month, Grassley lodged a similar request with the Departments of Justice and Agriculture.

“While consumers are facing record-level prices at the meat counter, America’s Beef producers are being forced to sell their cattle to meatpackers at a loss, if they can sell them at all,” Sen. Grassley said. “Consolidation in the meatpacking industry has exacerbated the market pain on both sides of the supply chain, and producers and consumers need to know whether unfair business practices by packers are to blame.”

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“I’ve called on the Trump administration to look into unfair or anticompetitive practices and I’m grateful that President Trump has made this issue a priority,” Grassley added. “USDA is looking into unfair pricing practices. DOJ must also examine if any collusion within the packing industry has taken place in violation of our antitrust laws.”

Grassley has long raised concerns about consolidation in the meatpacking industry and pressed USDA to protect independent producers.

The National Cattlemen’s Beef Association recently called for an investigation into the business practices that lead to unfair marketplace for beef producers. R-CALF filed suit against the Big Four packers last year alleging that the four companies are engaging in an “allied strategy” in defiance of U.S. anti-trust law.

Rick Pate is a cattle rancher in Lowndes County. The Pate family has raised Charolais beef cattle in Alabama for decades.

(Original writing and research by Montgomery area writer Amy McGhee contributed to this report. McGhee’s parents have a Black Angus beef cattle farm in Tennessee.)

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Economy

Alabama Gulf Coast beaches remain closed for now

Brandon Moseley

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Alabama Gov. Kay Ivey announced that beaches will remain closed for now due to ongoing repair and cleanup efforts in the wake of Hurricane Sally.

“Working closely with Gulf Shores Mayor Robert Craft and Orange Beach Mayor Tony Kennon, as well as Commissioner Billy Joe Underwood, the governor has agreed to keep Baldwin County’s beaches closed until Friday, October 2nd,” the governor’s office said in a statement. “This will allow those communities additional time to get their beaches ready for public enjoyment in a safe, responsible manner.”

Mobile County beaches might open earlier than that.

“Likewise, the governor has been in touch with Mayor Jeff Collier, and she is prepared to amend the beach closure order for Mobile County when he signals that Dauphin Island is ready to reopen their beaches,” the governor’s office said in a statement. “At the present time, all Alabama beaches remain closed until further notice.”

Hurricane Sally came ashore near Gulf Shores on Sept. 16 as a category two hurricane with 105 mile per hour winds. Numerous homes, businesses and farms have been destroyed and many more have seen serious damage.

“As of Wednesday night, approx. 37,000 cubic yards of Hurricane Sally debris (equivalent to roughly 1,700 truck loads worth) has been picked up in Orange Beach since Sunday (4 days),” the city of Orange Beach announced. “Kudos to our debris contractor CrowderGulf.”

“I spent Sunday afternoon meeting with senior staff and I believe we will need some time to get our buildings safe for children to return,” said Baldwin County Schools Superintendent Eddie Taylor in a letter to parents. “We live in a very large county. Power may be on in your area and your school may not have any damage, but we cannot open schools unless all schools can open. Our pacing guides, state testing, meal and accountability requirements are based on the system, not individual schools.”

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“We have schools without power and for which we do not expect power until later this week,” Taylor said. “In this new age, we need internet and communications which are currently down so we cannot run any system tests. We have physical damage at our schools including some with standing water, collapsed ceilings and blown out windows. We have debris on our properties and debris blocking our transportation teams from picking up students. All of this must be resolved before we can successfully re-open.”

“If everything goes as planned, I expect we will welcome back students on Wednesday, September 30,” Taylor said. “Prior to returning students to school, we will hold two teacher work days to get our classrooms and our lessons plans back on track.”

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Economy

SNAP replacement benefits coming to three counties hit by Hurricane Sally

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Thousands of SNAP recipients in Mobile, Baldwin and Escambia counties are set to receive automatic replacement benefits as a result of Hurricane Sally, the Alabama Department of Human Resources announced Thursday.

Recipients who received their benefits Sept. 1 through Sept. 16 will receive a replacement of 50 percent of their regular monthly benefit. Those who received supplemental pandemic maximum allotment payments will receive a replacement of 30 percent of those benefits.

The U.S. Department of Agriculture Food and Nutrition Service approved the replacement benefits today at the request of DHR. The benefits are intended to replace food purchased with SNAP that was lost to widespread power outages caused when Hurricane Sally made landfall on Sept. 16.

“Our priority is to remove the very real threat of hunger for the many Alabamians who are struggling from the devastation of Hurricane Sally,” said Alabama DHR Commissioner Nancy Buckner. “The first step toward that goal is to replace the food that so many Alabamians lost to the storm. We are actively working to obtain additional resources to provide much-needed relief for the region as it recovers.”

Hurricane Sally caused over 265,000 households to lose power for at least four hours in Mobile, Baldwin and Escambia counties, where approximately 54,000 households will receive SNAP benefits totaling an estimated $8.5 million.

Those recipients should expect to see the replacement benefits automatically loaded onto their EBT cards next week.

The Food Assistance Division of DHR administers the SNAP program in Alabama.

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More information about the program can be found at dhr.alabama.gov/food-assistance.

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Economy

Unemployment assistance available to workers in Baldwin, Escambia and Mobile Counties

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Gov. Kay Ivey took a tour of the damage from Hurricane Sally on the gulf coast Friday September 18, 2020. (Governor's Office/Hal Yeager)

Alabama Department of Labor Secretary Fitzgerald Washington announced Thursday that workers who became unemployed as a direct result of Hurricane Sally in Baldwin, Escambia and Mobile Counties may qualify for unemployment assistance.

People who live in or worked in these counties and became unemployed due to Hurricane Sally during the period of Sept. 14, 2020, may be eligible for assistance under the Disaster Unemployment Assistance program, which was triggered when President Donald Trump designated the area as a disaster area on Sept. 20, 2020.

“Generally, those who are eligible for state unemployment benefits are not eligible for DUA, but a claimant may qualify if state unemployment compensation benefits are exhausted,” said Washington. “If you believe you are entitled to these benefits, I urge you to file a claim to see if you are eligible.”

People who may be eligible for Disaster Unemployment Assistance include the following:

  • Individuals who no longer have a job, are unable to reach the place of employment, or were scheduled to start work in the major disaster area and the job no longer exists
  • Those who became the breadwinner or major support of the family because the head of household died, or those who cannot work because of an injury incurred during the major disaster

All the previously described circumstances must be as a direct result of the hurricane. Self-employed individuals must provide a copy of their 2019 tax return, business license or Form 1099 within 21 days after applying for DUA benefits.

Claims can be filed through ADOL’s website at labor.alabama.gov or by calling 1-866-234-5382.

The deadline to file a DUA claim is Oct. 28, 2020, for Baldwin, Escambia and Mobile Counties.

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Alabama Farmer’s Federation starts a relief fund for farmers impacted by Sally

Brandon Moseley

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A satellite image of Hurricane Sally. (VIA NATIONAL WEATHER SERVICE)

The Alabama Farmers Federation said Monday that it has established a relief fund to help farmers from across the state whose farms were damaged by Hurricane Sally.

“When disaster strikes, I am always impressed by the people of Alabama and their giving spirits,” said Alabama Farmers Federation President Jimmy Parnell. “As we started receiving photos of damaged crops, barns and equipment, we also started getting questions from people about what they could do to help our farmers, and that’s why we’ve established this fund.”

All the donations to the relief fund are tax-deductible and may be made online or by check payable to Alabama Farmers Agriculture Foundation at P.O. Box 11000, Montgomery, AL 36191. Please include “hurricane relief fund” in the check memo line.

“Most of our farmers had as good a crop as we’ve ever seen, and it was so close to harvest for cotton, soybeans, peanuts and pecans,” Parnell said. “It’s devastating to lose a crop that had so much promise. Our farmers are great people who are assisting each other with cleaning up the damage, and we’re so grateful to everyone across the state who is helping in some way, like donating to the relief fund.”

Hurricane Sally made landfall near Gulf Shores as a category two storm Sept. 16 with maximum sustained winds of 105 mph. Official reports from the National Weather Service show more than 20 inches of rain in Baldwin County.

The combination of heavy rains and high winds damaged crops, structures and equipment from Mobile and Baldwin Counties in the southwest through Russell County in the east.

It has been a difficult few years for farmers.

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While the general economy had been doing well prior to the coronavirus global pandemic, the farmers were caught in the middle of an international trade dispute over tariffs and fair competition.

Chinese retaliation against Americans farm products depressed commodity markets from 2018 through early this year.

When it appeared that the U.S. and China had come to a trade accord in January, the coronavirus hit along with massive disruptions in the supply chain.

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Farm bankruptcies were already up pre-COVID-19. The loss of the 2020 crop could push some already struggling agribusinesses over the brink.

The Alabama Farmers Federation is Alabama’s largest and most influential farmers’ organization.

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