Over the past year, nation-wide foodservice disruptions have caused tremendous financial pain to our nation’s family farmers and the entire U.S. food supply chain. Since the first days of the pandemic, the National Potato Council has worked tirelessly to advocate for relief for the potato industry.
NPC and our state partners estimated that more than 70 percent of the potato industry was directly impacted by the government-mandated shutdowns and food service restrictions. With 60 percent of all potatoes grown in the United States destined for food service customers, the nationwide closures of and operating restrictions on restaurants, bars, schools, and entertainment venues dried up the potato supply chain. The resulting oversupply of 1.5 billion pounds of potatoes could fill the U.S. Capitol Building 14 times over. The industry estimated that between $750 million-$1.3 billion in potatoes and potato products were clogged up in the pipeline.
Stimulus Relief and Federal Potato Purchases
In response to the COVID-19 pandemic, Congress passed the $2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES) stimulus package in late March 2020, which, among other things, provided loan and tax relief to small businesses. NPC continues to advocate for additional federal resources to assist growers and related facilities with implementing physical distancing and other virus prevention mandates. These include support for testing, personal protective equipment, housing enhancements, and other expensive yet vital investments.
In early May, NPC welcomed USDA’s announcement of a $50 million surplus potato purchase to support the industry. The potato purchase was the largest of all the specialty crop purchases announced by USDA and also the largest surplus potato purchase in history. This purchase, as well as the inclusion of potatoes in USDA’s Farmers to Families Food Box Program, helped address the national oversupply of fresh potatoes.
Coronavirus Financial Assistance Program
On Sept. 18, NPC welcomed an expansion of USDA’s Coronavirus Food Assistance Program. Coronavirus Food Assistance Program 2 (CFAP 2) provided an additional $14 billion for agricultural producers who continued to face market disruptions and associated costs due to the government-imposed food service disruptions in response to the COVID-19 pandemic.
For specialty crop growers, including potato growers, CFAP 2’s payment calculations are based on a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales. Payments are limited to $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies, limited partnerships may qualify for additional payment limits when members actively provide personal labor or personal management for the farming operation.
The program ran in parallel to the previous CFAP, which had a participant signup deadline of Sept. 11, 2020. The original program was based upon nationwide commodity price declines from Jan. 1 through March 15, 2020. The potato industry estimates that more than 70 percent of the potato industry has been directly impacted by the government-mandated shutdowns and food service restrictions, with much of the financial impact occurring well after CFAP’s March 15 deadline.
Although potatoes are the most widely produced specialty crop in the country, many impacted potato growers could not participate in USDA’s relief efforts due to challenges with the original CFAP’s structure. These impediments included losses occurring beyond April 15 being ineligible for relief, inadequate payment rates for certain potatoes, many of which were vastly below those of comparable commodities, and ambiguous eligibility for contracted potato acres.