[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


 THE STATE OF THE RURAL ECONOMY WITH AGRICULTURE SECRETARY SONNY PERDUE

=======================================================================

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION
                               __________

                             MARCH 4, 2020
                               __________

                           Serial No. 116-32


                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                  

          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                         
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
42-600 PDF                 WASHINGTON : 2020                            



                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

DAVID SCOTT, Georgia                 K. MICHAEL CONAWAY, Texas, Ranking 
JIM COSTA, California                Minority Member
MARCIA L. FUDGE, Ohio                GLENN THOMPSON, Pennsylvania
JAMES P. McGOVERN, Massachusetts     AUSTIN SCOTT, Georgia
FILEMON VELA, Texas                  ERIC A. ``RICK'' CRAWFORD, 
STACEY E. PLASKETT, Virgin Islands   Arkansas
ALMA S. ADAMS, North Carolina        SCOTT DesJARLAIS, Tennessee
    Vice Chair                       VICKY HARTZLER, Missouri
ABIGAIL DAVIS SPANBERGER, Virginia   DOUG LaMALFA, California
JAHANA HAYES, Connecticut            RODNEY DAVIS, Illinois
ANTONIO DELGADO, New York            TED S. YOHO, Florida
TJ COX, California                   RICK W. ALLEN, Georgia
ANGIE CRAIG, Minnesota               MIKE BOST, Illinois
ANTHONY BRINDISI, New York           DAVID ROUZER, North Carolina
JOSH HARDER, California              RALPH LEE ABRAHAM, Louisiana
KIM SCHRIER, Washington              TRENT KELLY, Mississippi
CHELLIE PINGREE, Maine               JAMES COMER, Kentucky
CHERI BUSTOS, Illinois               ROGER W. MARSHALL, Kansas
SEAN PATRICK MALONEY, New York       DON BACON, Nebraska
SALUD O. CARBAJAL, California        NEAL P. DUNN, Florida
AL LAWSON, Jr., Florida              DUSTY JOHNSON, South Dakota
TOM O'HALLERAN, Arizona              JAMES R. BAIRD, Indiana
JIMMY PANETTA, California            JIM HAGEDORN, Minnesota
ANN KIRKPATRICK, Arizona
CYNTHIA AXNE, Iowa
XOCHITL TORRES SMALL, New Mexico

                                 ______

                      Anne Simmons, Staff Director

              Matthew S. Schertz, Minority Staff Director

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     3
    Submitted report.............................................    69
Craig, Hon. Angie, a Representative in Congress from Minnesota, 
  supplementary material,........................................    83
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     1
    Prepared statement...........................................     2
Schrier, Hon. Kim, a Representative in Congress from Washington, 
  submitted letter...............................................    84

                                Witness

Perdue, Hon. Sonny, Secretary, U.S. Department of Agriculture, 
  Washington, D.C................................................     4
    Prepared statement...........................................     7
    Supplementary material.......................................    86
    Submitted questions..........................................    92

 
 THE STATE OF THE RURAL ECONOMY WITH AGRICULTURE SECRETARY SONNY PERDUE

                              ----------                              


                        WEDNESDAY, MARCH 4, 2020

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:04 a.m., in Room 
1300 of the Longworth House Office Building, Hon. Collin C. 
Peterson [Chairman of the Committee] presiding.
    Members present: Representatives Peterson, Costa, Fudge, 
McGovern, Vela, Plaskett, Adams, Spanberger, Hayes, Delgado, 
Cox, Craig, Brindisi, Schrier, Pingree, Bustos, Maloney, 
Carbajal, Lawson, O'Halleran, Panetta, Kirkpatrick, Axne, 
Torres Small, Conaway, Thompson, Austin Scott of Georgia, 
Crawford, Hartzler, LaMalfa, Davis, Yoho, Allen, Bost, Rouzer, 
Abraham, Kelly, Comer, Marshall, Bacon, Dunn, Johnson, Baird, 
and Hagedorn.
    Staff present: Lyron Blum-Evitts, Carlton Bridgeforth, 
Melinda Cep, Jacob Chisholm, Patrick Delaney, Jasmine 
Dickerson, Brandon Honeycutt, Chu-Yuan Hwang, Prescott Martin 
III, Chief Counsel; Felix Muniz, Jr., Michael Panetta, Troy 
Phillips, Lisa Shelton, Anne Simmons, Ashley Smith, Luke 
Theriot, Katie Zenk, Paul Balzano, Callie McAdams, Matthew S. 
Schertz, Ricki Schroeder, Patricia Straughn, Jennifer Tiller, 
Trevor White, Dana Sandman, and Justina Graff.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    The Chairman. Members take their seats, and we will get 
started here. We are a couple minutes late, but we obviously 
have a quorum, and we appreciate everybody being here, and very 
much appreciate the Secretary being willing to come up and 
spend some time with us.
    First of all, Mr. Secretary, on behalf of my sugarbeet 
guys, I want to thank you and the President for what you did to 
help our industry. It was a huge hit that we took, and you are 
going to help us survive. I hope you tell the President as well 
that we very much appreciate what you guys did.
    We welcome you here to the Agriculture Committee today to 
review the state of the farm economy. The Secretary has, of 
course, been at his job for what, 2 or 3 years now, 3 years? 
You still have a little bit of hair left. He is going to tell 
us where he sees the farm economy going in the coming year, as 
well as what is going on over at the Department.
    Today, we are also welcoming our newest Member of the 
Committee from New Mexico, Xochitl Torres Small, who is from 
New Mexico's 2nd Congressional district, which has a lot of 
agriculture. It is a rural district, has a border area, and she 
is going to be a great new Member and it is going to be a great 
thing for her district to have her on the Committee. We very 
much welcome you and look forward to working with you.
    We have seen farm income numbers come out for 2019, and 
really, if it weren't for the payments to farmers through the 
Market Facilitation Program and disaster payments, farm income 
would have been in the tank last year. A farm economy that is 
propped up by payments, I think we all agree, is not what we 
want and that is not a healthy farm economy. I really hope that 
these markets can return to normal, but I am concerned about 
the President's comments that we are going to have a third 
payment potentially. I don't know, maybe you can give us some 
insight into that. But that makes me wonder if we are talking 
about third payments as to what is going on with these trade 
deals and whether things are going to turn around there. I hope 
they do. A promise has been made to these farmers, and they 
don't want these payments. They want trade. They want these 
markets reestablished, and I think you understand that. We all 
understand that, and we all want to work together to try to 
make that happen.
    I told you last year that I appreciated you always shooting 
straight with us. You have done that, and so, I would like to 
hear today from you some of your straight talk, how you view 
things in the farm economy, over at the Department, and how you 
see us recovering and thriving, getting back to where we were 
some years ago.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Good morning, and welcome to today's hearing to review the state of 
the farm economy. Welcome also to our witness, Agriculture Secretary 
Sonny Perdue, who will talk about where he sees the farm economy going 
in the coming year, as well as what's going on over at the Department.
    Today we are also welcoming the newest Member of the Committee. 
Congresswoman Xochitl Torres Small from New Mexico's second 
Congressional District has joined us. Coming from a rural, border 
district with a significant agricultural presence, we are lucky to have 
her perspective and experience.
    We've seen the farm income numbers come out for 2019. If it weren't 
for payments to farmers through the Market Facilitation Program and 
disaster payments, farm income would have been in the tank last year. A 
farm economy propped up by payments from the government isn't a healthy 
farm economy.
    I really hope the markets return to normal. But the President's 
comments about a third payment also don't give me a lot of hope that 
we'll see tangible benefits from these new trade deals anytime soon. 
That's a promise that the Administration made to farmers, and without 
it, the farm economy isn't going to recover.
    I told you last year that I appreciated you always shooting 
straight with us, Secretary Perdue, so I'd like to hear from you today 
on how you view the state of things and how to make sure the farm 
economy recovers and thrives like we all want it to.

    The Chairman. I appreciate you being here, and I recognize 
the Ranking Member for a statement.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    Mr. Conaway. Thank you, Mr. Chairman. Secretary, thank you 
for being here. I also would like to welcome our new Member. 
She represents my three grandsons who live is Los Cruces, and 
so I am glad to have her on the Committee. She will do a great 
job.
    Mr. Secretary, we recognize your hands are full. Your hard 
work in implementing that 2018 Farm Bill, WHIP+, disaster 
assistance, Market Facilitation Program, has been and continues 
to be absolutely vital in helping our farmers and ranchers 
weather the seventh straight year of recession and a brutal 
string of natural disasters. I know that you and the President 
have taken some heat for providing Market Facilitation Program 
payments to farmers, but I would hate to see what the situation 
in farm and ranch country would be right now if you had not 
taken those steps. We would be having a very different 
conversation today, akin to the kind of discussions that were 
taking place through the 1980s farm financial crisis.
    Our farmers and ranchers were targeted by China because the 
President put his foot down against nearly 30 years of 
predatory trade practices that hurt American workers, as well 
as our producers. The first and second MFP payments were as 
justified as they were critical to our farmers and ranchers, 
and I strongly believe that unless something gives here very 
soon, an announcement of an MFP 3 will be absolutely vital to 
the survival of our producers.
    I am also grateful that the President communicated directly 
with farmers and ranchers in rural America last week to assure 
them that he and his Administration are going to continue to 
stand by them through these difficult times.
    For those who have ideas on how to improve MFP so it works 
better for their producers, they should talk with the Secretary 
about those ideas rather than simply criticize this vital 
assistance that literally means the difference between farming 
another year, or losing the farm. To the critics, I would say 
they ought to be a part of the solution, rather than always 
being a part of the problem.
    Mr. Secretary, I greatly appreciate all that you and the 
President are doing to open up new markets for our farmers and 
ranchers. Passage of USMCA, completion of the Phase 1 agreement 
with China, the U.S.-Japan agreement, the U.S.-Korean 
agreement, all hold great promise for our farmers and ranchers, 
and I know that you and the Administration will be vigilant in 
ensuring that the promises become reality.
    The real potential for bilateral agreements with the UK and 
the EU and with India are also very encouraging, and I 
especially appreciate your leadership, Mr. Secretary, in 
pressing the EU to at last adopt Norman Borlaug's Green 
Revolution, which has saved billions of lives while conserving 
natural resources worldwide. If we are going to feed nine 
billion people in the next 30+ years, the path Borlaug charted 
decades ago remains the only acceptable path forward. That is 
why I am pleased to work with you and what you are doing, Mr. 
Secretary, in your recently announced Agriculture Innovation 
Agenda. Reducing food waste, enhancing water quality, 
conserving resources, and strengthening U.S. energy 
independence are all goals that we can and should be able to 
agree on. Thank you for leading the way on this effort and for 
making our nation's farmers and ranchers an integral part of 
your plan.
    There is one issue I want to visit with you about, and that 
is making sure that for the WHIP+ Disaster Program, that it 
complies with the law and your strong belief that the program 
should incentivize higher levels of crop insurance, not hinder 
them. Unfortunately, an unintentional glitch in the WHIP+ 
formula means that farmers who bought higher levels of coverage 
are penalized more than those who bought lower coverage in the 
case of unharvested acres. I know that this is not your intent, 
and I believe that the USDA did not desire this result. But it 
is a serious problem and I think it ought to be fixed so we 
honor the intent of the law and your conviction that disaster 
aid should never undermine crop insurance. I look forward to 
our continued work on this issue to minimize these disparities.
    For now, I want to reiterate my thanks to you and the 
President for all you are doing to stand by our farmers and 
ranchers through these very difficult times.
    With that, Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman, and I ask that other 
Members submit their opening statements for the record to 
ensure that there is ample time for questions during this 
hearing.
    I, again, welcome our witness, Mr. Perdue, Secretary of the 
Department of Agriculture. The floor is yours and you may take 
as much time as you consume. I am not going to run the clock on 
you, and we very much appreciate you being here.

 STATEMENT OF HON. SONNY PERDUE, SECRETARY, U.S. DEPARTMENT OF 
                 AGRICULTURE, WASHINGTON, D.C.

    Secretary Perdue. Well, thank you very much, Chairman 
Peterson and Ranking Member Conaway. First of all, I appreciate 
the opportunity to be here. I appreciate, really, the 
attendance of the Committee today, for all the distinguished 
Members here. I look forward to hearing their questions and 
responding the best I can.
    You are absolutely right, Mr. Chairman. It was a tough 
year. Spring of 2019 was tough, and the payments that you all 
have authorized and facilitated, both indemnity as well as the 
Market Facilitation Program, made a difference in lives across 
rural America this last year. It was spring flooding in the 
Midwest, continuation of cold, wet conditions, and then as you 
well know and experienced, an early blizzard in Minnesota and 
the Dakotas. A lot of the crops got frozen on the ground, and 
some are still yet to be harvested in that way.
    But despite a tough weather year and tough trade 
environment, it is interesting the facts show that net farm 
income increased 11.7 percent from $83\1/2\ billion to $93 
billion, and frankly, we have already talked about some of the 
reasons for that. That was the indemnity payments. The safety 
net of crop insurance spent $9.46 billion in indemnity benefits 
distributed to producers, along with the $600 million in 
prevented plant top off payments that way. The standing 
disaster program administered by the Farm Service Agency, that 
is the safety net that you all vote for in the farm bill, 
provided nearly $690 million for assistance in 2019, and as you 
well know, you all participated and supported and voted for an 
additional $4.5 in ad hoc disaster payments as well for 2018 
and 2019 losses for those caused by hurricanes, tornadoes, 
floods, snow storms, excessive moisture, wildfires, drought, 
and most anything else that can happen on the farm.
    Thank you for y'all's thoughtfulness and concern about the 
American farmer and rancher, and we appreciate the ability to 
be able to do this. We appreciate--farmers are optimistic and 
we hope--we are glad 2019 is in the books, and we look forward 
to better times in 2020.
    As you indicated, Mr. Chairman, we heard the mantra loud 
and clear over trade not aid, and I think that is where we are 
headed. This is not my prepared remarks, but I want to go ahead 
and address the issue that you mentioned about a third Market 
Facilitation Program payment. I am telling farmers to do what 
they have always done and part plant for the market. The 
President did make a tweet, but many people, and farmers in 
particular, we always read what we want to see in that. It was 
preceded by a major two-letter word there in the beginning, if. 
If the trade does not materialize as we anticipate it will, 
then he is willing to support another one. But I am telling 
farmers not to anticipate one. Don't expect one. We know there 
will be some weaning pressure here as people have come to be 
comfortable with that. Our goal is not to continue a Market 
Facilitation Program payment in the ongoing future. The safety 
net that you all designed under the crop insurance program and 
the other programs for USDA, we believe, is adequate for the 
future in that regard.
    I am telling farmers that if we get the export, we get the 
trade, and we don't see prices increase, then the Market 
Facilitation Program was not a price support program. It was a 
trade disruption program, not price support. If we see trade 
increase and prices don't go up, that is a market signal to 
farmers who are producing too much, and that is the way the 
markets have always worked. We have more supply and less 
demand, prices go down. Less supply, more demand, prices go up. 
So, don't look for us to support a Market Facilitation Program 
as a price support program. Look at it for a trade disruption 
program. That was the principle in the foundation of the 
original Market Facilitation Program regarding trade 
disruption. I want to be clear about that. We can talk more 
about that in the questions, but I really wanted to get that 
out, since you mentioned it earlier, about that.
    But we do, at USDA, remain committed to delivering those 
programs of support that you all have authorized for those that 
need it most. The new trade deals and the strong consumer 
demand in the United States and abroad are a signal that bright 
days are ahead. None of us obviously know what the impact is 
going to be with the coronavirus, and that is yet to be 
determined. We are going to do what we have always done, and do 
what needs to be done in that regard, nationally and 
internationally in that way.
    The good news is we serve a group of people who are 
ultimate optimists. It takes that spirit and optimism every 
year to take their equity and put it in the ground and hope a 
good crop and weather makes it productive. And that is why it 
is fun to serve these folks, and they have made it perfectly 
clear to me that they would rather have trade, not aid, and it 
is certainly more fulfilling when we grow and produce things, 
rather than getting a check in the mailbox.
    The Phase 1 deal with China, I am encouraged by USMCA, 
Japan, the renewal of the KORUS arrangement, and again, to all 
the smaller countries, the singles that Ambassador Lighthizer 
talks about, will set us up for a great future. I am not a 
market prognosticator, and I don't want to pretend to be one, 
but we have seen, based on the future of the trade deals, We 
have seen the lows put in for the recent area. It is not going 
to just climb up. We were disappointed that we didn't see 
prices respond more in the Phase 1 deal, but obviously, the 
market and all farmers kind of act like they are from Missouri. 
They want to see it rather than hear about it, and I think that 
is what we are seeing that way. I think that is what we will 
see.
    The good news about that is, from a technical level at USDA 
and working with the technicians in China, they are doing the 
kind of things that it is going to take to facilitate that 
trade. A lot of those non-trade barriers, they are working on 
those types of things on an ongoing basis. We see a sincerity 
in them living up to the agreement, those hardline numbers that 
Ambassador Lighthizer negotiated. We see a commitment to doing 
that. We are going to be tracking that. Right now, we are in a 
trusting but verifying environment, and that is what we will 
continue to report to you all and the President as we go 
forward. The unilateral ability to enforce that is a very 
powerful tool in that regard. We appreciate these trade 
agreements. That is what farmers want to see is trade, not aid.
    Last week, as you may have heard, we also tried to support 
the ethanol market by declaring that we will promote another 
infrastructure program in helping to move to E15 year-round. 
The President, as you know, created the year-round market for 
E15 or authorized that, and we will be doing a Higher Blends 
Infrastructure Incentive Program of $100 million in helping the 
retailers to move to infrastructure that can support ethanol, 
E15, and B20 and higher as we go forward. We are taking 
applications. It will be done on a competitive basis as people, 
and scored, and really to make sure we get skin in the game 
from the retailers, as well as just accepting a grant.
    Our goal at USDA is to work all across the environment of 
the economy to increase rural prosperity. This week, we are 
announcing more rules on employment and training programs to 
help promote long-term success and self-sufficiency as we try 
to move people into employment. And I do want to tell you, I 
think we have gotten great results and great acclaim out here 
in putting the money to work that you all did with the 
ReConnect Program. You know how important broadband is to our 
whole country. It has the potential to be transformative, and 
where we are able to go in these communities, and a lot of 
times run fiber to the home, it is going to be life-changing 
for many of your citizens out there. We have had good results 
and good feelings where that happens. We just need to continue. 
We have opened up the second round of applications. It will 
close the 16th of March, and more of your communities will be 
served based on the second and third round that you gave, $1.1 
billion in that way for reconnecting broadband across the 
country.
    Ranking Member Conaway talked about the Agricultural 
Innovation Agenda to best allow our programs and research and 
provide farmers the tools they need to continue to be 
innovative and successful. We are talking about the miracle of 
American agriculture for the last 75 years has just been 
phenomenal in its productivity, reducing its environmental 
footprint, doing more with less, and actually less arable 
acres, ten percent less acres, and 400 percent increase. That 
is a real miracle that we don't talk about a lot, but I am 
going to be talking more about it.
    I don't see my friend Congressman Scott here, but I know Al 
and others--excuse me, Mr. Lawson, I know you all are 
interested in the program you all did on the future of 1890s 
universities. We have gotten that--those, because of you, 
those--we are going to be welcoming those students holding 
those scholarships here for this fall, and I visited several of 
them, and they are excited about that aspect as well.
    All in all, we have working to implement the 2018 Farm 
Bill, and stood up the key new programs that you all did, like 
Dairy Margin Coverage Program and rules for industrial hemp, 
and obviously, we have had a busy year. Certainly with the farm 
bill implementation, another Market Facilitation Program 
payment, ad hoc disaster program, and there is still a lot of 
work to be done.
    As you well know, one of the other issues that we have to 
deal with is a stable, reliable ag labor workforce in order to 
maintain the best and most competitive agricultural sector in 
the world. We look forward to working with Congress to do that.
    I just want you to know, I love this job. It is an honor to 
serve as the 31st Secretary of Agriculture of the United States 
of America, and I am proud of the great strides. We have a 
great team over there. We have 100,000+ good folks that just 
want to do good for America, and I am proud of them. We will 
continue to try to work every day in making USDA the most 
effective, the most efficient, and most customer-focused 
Department in the Federal Government.
    Thank you for the opportunity to be here to make that 
statement uninhibited. I look forward to your questions, Mr. 
Chairman.
    [The prepared statement of Secretary Perdue follows:]

Prepared Statement of Hon. Sonny Perdue, Secretary, U.S. Department of 
                     Agriculture, Washington, D.C.
    Chairman Peterson, Ranking Member Conaway, and distinguished 
Members of the Committee, it is a privilege to once again appear before 
this Committee as the 31st Secretary of Agriculture and testify on the 
state of the rural economy.
Sowing Prosperity in Rural America
    Since we last met, USDA has worked diligently to implement the 2018 
Farm Bill. Among our milestones, I committed to you in February last 
year we would offer the Dairy Margin Coverage (DMC) Program, a 
significant new risk management tool, in June of 2019, and we followed 
through. Implementation of conservation programs by the Farm Service 
Agency (FSA) and the Natural Resources Conservation Service (NRCS) is 
on track as well, including FSA's 54th Conservation Reserve Program 
general sign-up, which opened in December--another commitment kept. We 
established the U.S. Domestic Hemp Production Program in advance of the 
2020 planting season and adapted several existing programs to this 
promising commodity not widely cultivated since 1937.
    USDA made strides to reduce trade barriers and ensure farmers, 
ranchers, and food manufacturers and workers can fairly compete against 
anyone in overseas markets. Examples of our accomplishments include 
securing full access for beef to Argentina and Japan, restoring market 
access for poultry and poultry products to China, improving access for 
wheat to Brazil, and guaranteeing rice access to the Korean market. In 
our effort to promote U.S. products around the world, USDA led six 
trade missions that enabled more than 170 U.S. companies and 
organizations to engage in 3,200 one-on-one meetings with foreign 
buyers. Our trade missions and 22 endorsed trade shows generated nearly 
$3 billion in projected export sales, while our export financing 
programs supported another $2 billion in exports in 2019. President 
Donald Trump, meanwhile, laid the foundation for a stronger farm 
economy through trade accomplishments like the Phase 1 Deal with China, 
USMCA, and trade agreement with Japan, which USDA will look to build 
upon in 2020.
    Not only is the United States producing food efficiently and 
sustainably, but most importantly we have one of the safest food 
supplies on the planet. Over the last decade, USDA has modernized 
inspection systems to align with 21st century technology and to prevent 
the hazards that we cannot see--the invisible pathogens and microbes 
that cause foodborne illness. USDA is committed to using the best 
science and technology available to protect the American food supply 
and ensure the safety of meat, poultry, and processed egg products.
    As we served out our motto to ``Do Right and Feed Everyone,'' USDA 
finalized a rule that will encourage more American to enter, re-enter, 
and remain in the workforce, helping individuals and families start on 
a path to a better life, The Trump Administration has produced the 
longest economic expansion in U.S. history, with an unemployment rate 
of 3.6% and 6.8 million job openings. All individuals deserve the 
dignity of work and the lasting transformation it provides to achieve 
their own American dream. Congress asked us in the 2018 Farm Bill to 
focus on case management and promote the long-term success and self-
sufficiency of SNAP recipients and later this week, we will be issuing 
a proposed rule that will strengthen the way states serve our customers 
through Employment and Training programs. We believe that human 
connection, not just a monthly SNAP benefit, has the power to change 
people's lives.
    USDA plowed ahead with IT modernization initiatives to improve 
customer experience. Customers can now discover our national treasures 
on Recreation.gov or save time and paperwork associated with disaster 
assistance, farm programs, and H-2A applications on Farmers.gov, all 
using our interactive tools in the palm of their hand. USDA also 
developed dashboards across eight Mission Areas and seven 
administrative functions, which provide employees with sophisticated 
data analytics to improve internal decision-making and maximize the 
impact of customer-facing programs. USDA will continue innovating 
across the enterprise to achieve faster, easier, and friendlier 
programs, with a special focus on areas of greatest potential impact on 
customer service, like expanded payment options for farm programs, 
automated AGI threshold compliance, and digital acreage reporting.
    The Forest Service used the new farm bill and 2018 Omnibus 
authorities to do work in the right place at the right scale. We sought 
to improve forest conditions across all forests by setting aggressive 
targets for treating acres and producing timber volume. At the same 
time, we maintained our commitment to reducing hazardous fuels and 
restoring forest health. In 2019, USDA signed shared stewardship 
agreements with twelve states and the Western Governors Association to 
better coordinate our forest and grassland management resources and 
priorities. In the coming year, USDA will seek to more than double our 
shared stewardship partnerships.
    USDA worked closely with the Environmental Protection Agency (EPA) 
to strengthen America's energy production, energy security, and 
supported our nation's farmers by promoting domestic ethanol and 
biodiesel renewable fuel use through the approval of year-round E15. We 
provided greater transparency and certainty in the Renewable Fuel 
Standard by making the commitment to ensure that 15 billion gallons of 
conventional ethanol be blended into the nation's fuel supply beginning 
in 2020, and that the volume obligation for biomass-based diesel are 
met.
    Last week, as part of President Trump's key promise to promote 
biofuels I announced USDA's Higher Blends Infrastructure Incentive 
Program (HBIP) which will open for application early this summer and 
will provide for $100 million in grants to better enable market 
adaptation for higher blends of ethanol and biodiesel by investing in 
infrastructure. More than that USDA is putting our money where our 
mouth is. Last week I directed the USDA to increase the number of 
biofuel-capable vehicles, and the use of biofuels, in our fleet 
operation which is one of the largest fleet operations in the Federal 
Government. This Administration will continue to support renewable 
fuels, including ethanol, biodiesel, and biomass to achieve market-
driven demand.
    President Donald J. Trump is also sowing prosperity in rural 
America through broadband deployment. USDA's initial round of the 
ReConnect Pilot Program provided $751 million in grants and financing 
for 83 projects to extend broadband access to 431,000 rural Americans. 
USDA is helping reconnect rural communities to each other and the rest 
of the world, giving patients access to telehealth, students access to 
digital learning, and farms and businesses access to new technology and 
innovation. In December, USDA launched Re-Connect Program Round 2. The 
Rural Utilities Service is now accepting applications, grants, low-
interest loans, and 50/50 grant/loan combinations. In Fiscal Year 2019, 
Congress appropriated $550 million and an additional $555 million was 
made available in the FY 2020 Appropriations Act. In total, USDA now 
has $1.1 billion waiting for rural broadband deployment. I often say we 
need a moonshot approach to bring high-speed internet access to 
everyone in rural America. I extend my appreciation for Congress' 
continued commitment and investment in our ReConnect efforts.
    Despite our accomplishments in 2019, USDA recognizes these are 
challenging times and current state of the rural economy compels us to 
do more.
The State of the U.S. Rural Economy
    For 2020, net farm income is forecast at $96.7 billion, a three 
percent increase compared to 2019. While 2020 net farm income is still 
forecast far below the inflation-adjusted peak of $139.1 billion in 
2013, 2020 net farm income is anticipated to be five percent above its 
inflation-adjusted average (2000-2018) of $91.7 billion. This 
forecasted increase is in spite of a decrease in government payments 
and the trade deal with China not yet fully realized in market prices.
    Net cash farm income is forecast to decrease by nine percent from 
$120.4 billion in 2019 to $109.6 billion in 2020. However, the 2020 net 
cash farm income forecast is line with its inflation-adjusted average 
(2000-2018) of $110.2 billion. The difference between the increase in 
net farm income and the decrease in net cash farm income is due to 
changes in crop inventory. Net farm income accounts for the value of an 
increase in crop inventory, reflecting the increased value of 
production for the year. Net cash farm income accounts for the value of 
sales from inventory, so when inventory is held, that value does not 
add to net cash farm income. Given the poor weather in 2019, producers 
had to draw down crop inventories in 2019, adding to 2019 net cash farm 
income, whereas net farm income for 2020 reflects the forecast for 
better crop production that will allow for holding larger crop 
inventories.
    Spring flooding in 2019 pummeled the Midwest, leading to the 
slowest planting progress on record for corn. For 2019, roughly 20 
million acres were recorded as ``prevent plant,'' which is nearly 
double the previous record set of 11 million acres in 2011. The 
continuation of cold and wet conditions, and an early blizzard in 
October located in the Dakotas and Minnesota, led to hardship during 
harvest. This led to many acres of corn, soybeans, and sugar beets 
being left unharvested at the end of 2019. However, for 2020, cash 
receipts are anticipated to increase by one percent for crops overall, 
generally due to higher production, and 4.6 percent for livestock due 
to both higher prices and production.
    For 2020 we anticipate that producers will spend more on production 
with most expenses, including feed, labor, and fuel forecast to rise 
relative to 2019. This year will be the first since 2014 that total 
inflation-adjusted production expenses at the sector level are forecast 
to increase. Producers have less cash on hand as working capital is 
forecast to fall 15 percent from 2019 and 57 percent from the most 
recent peak in 2014. The decrease is the result of current assets--the 
value of items such as crop inventory, non-breeding animal inventory, 
and purchased input inventory--decreasing by four percent, while 
current debt--debt in which payments are due in the next 12 months--
increases by two percent.
    Farm sector debt continues to grow and is forecast at $425 billion 
with $265 billion in real estate debt--including loans using real 
estate as collateral--and $161 billion in non-real estate debt. 
Accounting for inflation, equity is forecast to decrease 0.7% in 2020 
compared to the previous year, while debt is anticipated to increase 
0.5%. This puts the debt-to-asset ratio for the farm sector at 13.59 
for 2020, the highest level since 2003 and passing the levels seen 
during the Great Recession. These overall values can mask areas of even 
greater vulnerability. The strength of land values varies 
geographically, with some states, like New Mexico, Minnesota and 
Georgia, seeing greater weakness even as others--such as California, 
Utah, and Idaho--hold steady or see modest increases. Debt-to-asset 
ratios also vary among farm businesses, with some commodity 
specializations showing a much larger share of highly leveraged 
operations. Overall, the number of crop farms in highly leveraged 
financial situations is approximately 1-in-12 and the number of 
livestock and dairy farms in highly leveraged financial situations is 
approximately 1-in-16.
    As farms become more financially vulnerable, the risks of loan 
delinquency and bankruptcy increase. For Farm Service Agency (FSA) 
direct loans, the rate of delinquency was similar at the end of 2019 
compared to the rate of delinquency at the end of 2018. However, the 
rate of Chapter 12 bankruptcy--bankruptcy specific to family farmers 
and family fishermen--is nearing three bankruptcies per every 10,000 
farms, a rate we are monitoring, but is still low compared to the 
1980s. The bankruptcy rate varies substantially by state. For example, 
in Wisconsin the rate is around seven bankruptcies per every 10,000 
farms, while in Illinois the bankruptcy rate is roughly two 
bankruptcies for every 10,000 farms.
    Our farmers work hard, are the most productive in the world, and we 
aim to match their enthusiasm and patriotism as we support them. When 
conditions test the resilience of the men and women who feed, fuel, and 
clothe the nation, President Trump has called on USDA to respond, and 
2019 was no different.
Standing Up for America's Farmers and Ranchers
    When I appeared before this Committee a year ago, the fallout of 
monumental storms and wildfires was testing the resilience of producers 
in the southeastern and western U.S. In 2019, farmers faced exceptional 
new challenges. Natural disasters, floods, drought, blizzards, and 
severe freezes dealt a hefty blow to some of the most productive 
regions in the heartland. USDA responded with all the tools available, 
making timely payments for loss claims on crop insurance policies and 
utilizing FSA's suite of disaster assistance programs for non-insurable 
crops, livestock, trees, vines, and bushes. USDA aided producers to 
install conservation practices on land damaged by severe weather and 
continues to provide help to communities to restore and enhance damaged 
watersheds and floodplains. In addition to these tools, USDA 
implemented the Wildfires and Hurricanes Indemnity Program Plus (WHIP+) 
using the funding provided by Congress under the Additional 
Supplemental Appropriations for Disaster Relief Act of 2019 and the 
Further Consolidated Appropriations Act. WHIP+ enabled $242 million in 
relief to-date for losses in 2018 and 2019, representing 10,433 
applications, and our diligent FSA staff continue to process new loss 
claims. This supplemental funding also provided roughly $592 million in 
additional assistance to producers who experienced unprecedented 
prevented planting in 2019. USDA is steadfastly implementing the new 
funding and authorities Congress provided in December. Although 
disaster assistance will not make producers whole, we hope the 
assistance will relieve some of the financial strain farmers are 
experiencing.
    While President Trump worked to address long-standing market access 
barriers across the U.S. economy, China, EU, Turkey, and India honed 
their pressure on the American farmer, for whom the success of 
producing abundance and selling to the world made especially vulnerable 
to trade disruptions. The President stood with rural America. After 
unjustified retaliatory tariffs from foreign nations targeted billions 
of dollars of agricultural trade and disrupted markets for commodities 
ranging from soybeans to almonds to pork, President Trump directed USDA 
to support our U.S. farmers and ranchers. While President Trump worked 
to address long-standing market access barriers, USDA continued its 
three-pronged approach developed in 2018 with modifications to make the 
Support Package for Farmers stronger and more effective for producers, 
authorizing up to $16 billion in support to respond to trade 
disruptions and unjustified retaliation.
    The Market Facilitation Program (MFP) provides funds to help 
producers implement alternative marketing strategies for their 
products. MFP was designed to help all farmers hurt by tariffs, but 
payment rates reflect the severity of the impact of trade disruptions, 
as some export-dependent commodities, such as soybeans, suffered larger 
trade damage than others that are less dependent on the markets 
affected by retaliation Although the commodities most affected by the 
tariffs are generally produced on larger farms simply by the nature of 
the commodities themselves, USDA applied payment limitations and 
income-based eligibility criteria to limit large payments to single 
farms consistent with what Congress established for traditional farm 
programs and recent supplemental disaster assistance programs. In 
addition, recipients were required to be actively engaged in farming 
with respect to ``covered commodities,'' which is assessed based on 
their contribution of inputs or management services to the operation. 
While limiting mechanisms effectively lowered payments to large 
producers, USDA also established a minimum per acre payment at $15 to 
increase assistance for farmers who produce on a smaller scale or grow 
commodities less affected by retaliatory tariffs. Although there has 
been much discussion about the size of farms and regional distribution 
of the MFP assistance, by design, the assistance flowed to states that 
produce or export the commodities most affected by retaliatory tariffs 
and the farms growing those commodities received more in assistance, 
subject to the guardrails highlighted above. The top commodities 
affected by the unjustified retaliatory tariffs were row crops, hogs, 
dairy, cherries, and almonds and those commodities--especially row 
crops--are generally produced on larger farms simply by the nature of 
the commodities themselves. The top states that received the assistance 
include Iowa ($1.6 billion), Illinois ($1.4 billion), Texas ($1.1 
billion), Minnesota ($1.1 billion), and Kansas ($1 billion) among the 
top five for 2019 MFP payments. Between July 25, 2019, when MFP was 
first announced and through the third and final tranche announced on 
February 3rd, 2020, FSA processed 1.8 million MFP transactions, 
providing more than $14 billion to 658,356 farmers.
    The Food Purchase and Distribution Program (FPDP), the second prong 
of our Support Package for Farmers, acquires surplus fruits, 
vegetables, milk and meats affected by trade retaliation. All products 
purchased were grown and raised on American farms by American farmers. 
FPDP represents a collaboration between the Agricultural Marketing 
Service and the Food and Nutrition Service to do right and feed 
everyone, acquiring the abundance of America's harvests for delivery to 
food pantries, school meals and other outlets serving low-income 
Americans. Examples of products delivered to those in need include 
pork, poultry, citrus, apples, and blueberries, to list a few. Through 
the first quarter of Fiscal Year 2020, USDA purchased nearly $350 
million, or more than 7,000 truckloads, worth of nutritious American-
raised food, including pork, poultry, citrus, apples, and blueberries, 
to list a few. In the months ahead, USDA is working to reach its target 
of $1.4 billion in total purchases.
    Agricultural Trade Promotion (ATP) Program, or the third prong of 
our Support Package for Farmers, awarded $100 million to 48 cooperator 
organizations to support trade missions and promotional activity for 
U.S. agriculture, food, fish and forestry products abroad. By providing 
foothold in new export markets, ATP funding will continue to generate 
sales and business for U.S. producers and exporters many times over for 
years to come.
    Our trying times in rural America call upon our immediate 
assistance but also focus USDA on establishing a vision for sustaining 
U.S. agriculture's leadership in the world.
Envisioning the Future of U.S. Agriculture
    We know ahead of us lies a dual challenge to produce enough food 
and agricultural products to meet the needs of a growing population and 
protect the natural resource base on which agriculture depends--both 
for current and future production. This challenge demands bold goals 
and bold actions. The Agriculture Innovation Agenda I announced on 
February 20, 2020, at our Agricultural Outlook Forum is USDA's 
commitment to the continued success of American farmers, ranchers, 
producers, and foresters in the face of these future challenges. Our 
commitment is bold: to increase U.S. agricultural production by 40 
percent while cutting the environmental footprint of U.S. agriculture 
in half by 2050. This is a Department-wide effort to align USDA's 
resources, programs, and research to provide farmers with the tools 
they need and to position American Agriculture as a leader in the 
effort to meet the food, fiber, fuel, feed, and climate demands of the 
future. I welcome your partnership as USDA supports farms of all sizes 
by setting goals and prioritizing innovation through research and 
program delivery through our Agriculture Innovation Agenda.
    Advances in biotechnology have great promise to enhance rural 
prosperity and improve the quality of American lives. Gene editing has 
emerged as a formidable agricultural tool to help the world meet its 
food production needs and increase the productivity of the American 
farmer and rancher by improving crop quality, increasing the 
nutritional value of crops and animal products, combating pests and 
disease, and enhancing food safety.
    USDA is actively working to ensure our domestic producers have 
access to these technologies by implementing President Trump's 
Executive Order 13874 (Modernizing the Regulatory Framework for 
Agricultural Biotechnology Products), which directs USDA and other 
Federal agencies to streamline our regulatory processes and facilitate 
the innovation of agricultural biotechnology to the marketplace through 
a predictable, consistent, transparent, science-based and risk-
proportionate regulatory system.
    Farmers need access to a stable and legal workforce to help 
cultivate, harvest, and deliver to market America's agricultural 
abundance. Many farmers experience trouble recruiting workers during 
peak seasons of need in rural parts of America, and our record-long 
economic expansion and low unemployment have compounded this problem. 
Estimates show currently over half of the experienced agricultural 
labor force is working without proper documentation on our farms, and 
the H-2A program needs improvement and modernization. Despite being a 
program used as a last resort, we have seen exponential growth in the 
H-2A program, suggesting that local workers are not available to do 
farm work. Farmers need long-term solutions that guarantee access to a 
legal and stable workforce. USDA has worked closely with the 
Departments of Labor, Homeland Security, and State to modernize the 
burdensome H-2A application process, making it easier for farmers and 
ranchers to follow the law and hire farm workers through the H-2A 
program. However, there are dimensions of this challenge only Congress 
can address, so we hope to see Senate and Conference actions to yield a 
bill President Trump can sign.
    I know Members who serve on this Committee and beyond share my goal 
to ensure USDA is adequately staffed to deliver efficient and effective 
service for our farmers, ranchers and rural communities. Even as USDA 
strives for innovation, automation, and business process 
reengineering--customers will always count most on our people. For the 
fifth consecutive year, attrition at USDA outpaced hiring in Fiscal 
Year 2019. Our agencies hired 5,002 permanent employees, while 6,954 
employees left USDA, most of whom were field based. Already in Fiscal 
Year 2020, USDA faces a deficit of hiring to attrition of nearly 600 
employees. The pace of attrition places an extraordinary demand on a 
Federal hiring process that is encumbered with hundreds of pages of 
requirements that frustrate qualified candidates and hiring managers 
alike. To help overcome this mounting challenge, USDA requested and 
received limited, temporary direct hire authority from the Office of 
Personnel Management for field and front-line positions in FSA, NRCS, 
Forest Service, Rural Development, and other agencies with significant 
field operations. Nonetheless, our administrative direct hire authority 
is limited by position, location, and duration and retains many 
restrictive features of the traditional Federal hiring process, so I am 
asking for your help in authorizing expanded direct hire flexibility at 
USDA to fill our field and front-line positions.
Conclusion
    Before I conclude, I want to thank our dedicated employees, without 
whom our service to rural America would not be possible. In 2019, we 
asked more of our people than perhaps at any other point: 
implementation of a new farm bill, execution of two Support Packages 
for Farmers, implementation of a supplemental disaster assistance 
program and its subsequent revisions, all in addition to their normal 
operations. It is a privilege to lead OneUSDA, while we strive to ``Do 
Right and Feed Everyone''.
    Thank you for the opportunity to testify this morning. I would be 
happy to answer any questions at this time.

    The Chairman. Thank you very much, Mr. Chairman. Mr. 
Secretary. Maybe I will give you this job. It might not be all 
that bad.
    I want to remind Members that they will be recognized for 
questioning in order of seniority, including Members that were 
here at the start of the hearing. And after that, you are going 
to be recognized in the order of arrival.
    With that, I would recognize myself for a couple of 
questions. First, as I said, we really appreciate you getting 
the announcement on the disaster for what happened to us in the 
sugarbeet area last week. The other questions I am getting from 
my constituents is about the quality loss issue that is part of 
the WHIP+. You are working on that, as I understand it. Can you 
kind of give us an update on where you are at with that, and 
when we might be able to see some kind of announcement about 
where that is?
    Secretary Perdue. The quality loss provisions, as you know, 
many of the crops that are standing in the fields, some yet to 
be harvested, many of them suffered weight loss issues and 
other quality loss issues that depress their prices when they 
are sold. They may have volume, but the quality is a huge 
disadvantage, and you all authorize us to look into the 
disaster provision over quality loss. It is a more complex 
thing. It is much more subjective and not as data-driven as 
others, but we are currently working on devising those rules, 
and it will have to be rules-based so it is never as fast as I 
would like to do it right away. But it will be rules-based. We 
will open that rule as soon as possible so farmers can take 
advantage of the quality loss provisions that you all 
authorize.
    The Chairman. You don't want to hazard any kind of a guess 
on how long this is going to take?
    Secretary Perdue. I would say probably in the April-May 
time period.
    The Chairman. Okay. Thank you.
    The other thing we have heard from back home and around the 
country is that folks went into their local FSA office to sign 
up for the general CRP signup that just closed. I guess it 
closed on the 28th. We are told that in some cases that the 
software wasn't working and that the handbook wasn't available 
apparently in those county offices. This meant that landowners 
weren't able to see what their county rental rate might have 
been so that they could take that into consideration when they 
were deciding whether to make an offer or not.
    Are you able to tell us, in light of all of that, how many 
offers were actually received during this signup, and how many 
acres were offered? Do you have any information on that?
    Secretary Perdue. Mr. Chairman, because of the software 
glitch and other types of things of people coming in at the end 
to sign up, we let everyone; well, we didn't extend. We put 
everybody's name who was interested even in inquiring on a 
register, and they will be eligible to work through this if 
they came in and the software was not available, which allowed 
them to look at all their potential outcomes of their farms, 
and we didn't have that or information they needed. Then they 
will be able to finish that up and be included in the signup. 
That is the reason we don't have good numbers today of that. We 
had some preliminary numbers, but we don't have good, sound 
numbers. We will get those numbers to you all and Members of 
the Committee as soon as we can process all those, and I think 
that will be soon. I am not talking about weeks; I am talking 
about really days in that area of processing those.
    The Chairman. You don't have a list of these people that 
got in there and how many people are involved in that?
    Secretary Perdue. We have a register of those who were not 
able to get there, whether it was a software glitch or they 
just got there and there was a line there.
    The Chairman. But you don't have any idea how many people 
that is nationwide that are on that registry?
    Secretary Perdue. I am sure FSA does. I don't have those 
numbers with me here today.
    The Chairman. If you could find out, if you know, I would 
like to have that information.
    Secretary Perdue. I feel like we can get that to you by the 
end of the day.
    The Chairman. However many people that is, they are going 
to be able to be processed before this issue.
    Secretary Perdue. Absolutely. That is the commitment, and 
we told them that when they came in. If there was a glitch and 
we couldn't have the software where they could see all their 
options, we put them on a register. But if they came in and we 
just didn't--they came in a group of people and we didn't have 
time to get to them, we put them on a register with a 
commitment that they would absolutely be eligible.
    The Chairman. Have these technical issues been fixed now at 
this time?
    Secretary Perdue. I am sorry?
    The Chairman. Are these technical issues that were----
    Secretary Perdue. They are resolved, and I am frankly 
embarrassed that we had them at all. I got a little peeved 
about that, actually.
    The Chairman. And the handbooks are out? The handbooks are 
out to the counties?
    Secretary Perdue. Yes, sir. The information should be all 
there. I don't know how many places there were limitations of 
not having a handbook of all the provisions of the program. We 
try to do a good job at that. We had these rules out in 
December. I would have thought everyone would have known all 
the provisions there, but yes.
    The Chairman. I assume that you are not entertaining any 
requests to have the CRP reopened?
    Secretary Perdue. No, I think we are amenable to that. 
Obviously, I want to see what the numbers look like. Our target 
goal for this year is 24\1/2\ million acres of variety, whether 
it is grasslands or other types of working lands and those sort 
of things, but my goal is to reach that target. I think that is 
your goal. Those are the targets you all set, and I am not 
saying that--your rules call for at least one general signup a 
year, but I am not saying that we can't have more than one.
    The Chairman. I appreciate that, and some of the folks who 
have been calling me would be pleased to hear that there is 
some flexibility there if you find you that we didn't have that 
good of a signup.
    Secretary Perdue. What we want to do is look at the numbers 
and be wise about how we look at those numbers. As you all 
know, you all changed some of the provisions that way, and we 
want to see what the response is from the farm community to 
know how to go forward.
    The Chairman. I am running over a little bit, but on the 
GRP, the Grassland Reserve Program, that signup doesn't start 
until you are done with CRP.
    Secretary Perdue. That is right.
    The Chairman. So, that means it will be put off for what, a 
month or 2 before it starts?
    Secretary Perdue. I think that is going to be in March as 
well.
    The Chairman. Okay. I am still getting feedback from around 
the country that people don't know about this program. Even in 
your FSA offices, they don't seem to know about this, and the 
farmers don't seem to know about it. The cattlemen don't know 
about it. Whatever you can do to try to do a better job of 
getting the information out about the Grassland Reserve 
Program; and hopefully, get the good signup out of that 
situation, would be appreciated, at least from this Member.
    Secretary Perdue. We will do our best, again, to 
communicate the program. If farmers don't know about it, that 
is bad. If we don't know about it, that is horrible, and we 
will make sure our people at our FSA offices certainly know the 
program, can talk about to farmers as they come in to do that. 
You know that you all created this and expanded the acres 
because of wildlife and other water quality issues, and really 
giving people an opportunity to take fragile land out of 
production and maybe improve their overall profitability.
    It is an important program that we want to do well. If we 
are not doing our job and helping people understand what it is, 
I will have to figure out what it is, how we have communicated 
that, and whether we are just doing a website or whether we are 
actually evangelizing that program.
    The Chairman. Thank you. Thank you, Mr. Secretary.
    Mr. Conaway, 5 minutes.
    Mr. Conaway. Thank you, Mr. Chairman.
    Mr. Chairman, I have a report here on the Market 
Facilitation Program payment that was published by the Ag and 
Food Policy Center at Texas A&M. I would like to submit that 
for the record.
    The Chairman. Without objection.
    [The report referred to is located on p. 69.]
    Mr. Conaway. This report determines that a significantly 
higher number of farms would be in poor financial condition and 
less likely to cash-flow without the assistance provided by the 
Administration. The report also found there is no regional bias 
built in to how county payment rates were calculated, and 
observes that 70 percent of the aid went to midwestern states. 
Given the competing narrative that MFP is allegedly biased 
toward southern producers, Mr. Secretary, would you explain to 
us the methodology about how the USDA determined those county 
payment rates for the second round?
    Secretary Perdue. I will do my best, Congressman. First of 
all, my instructions to our economists were kind of Sergeant 
Webb, just the facts, sir. In this area there was no 
predetermined regional demographic or sector bias in any of 
this.
    In fact, I would like to show you, you mentioned something. 
I have a chart here for your Committee that shows you the 
states that here that have--we will provide an electronic copy 
of all of that, but the darker states are where the highest 
payments were. This is $700 to $1 billion there per state. 
These lighter colors, it goes up lighter that way. I think you 
can see, Mr. Conaway, your state did okay along with Illinois 
and Kansas and Iowa and Minnesota in that way in those states. 
So, that is kind of where the money came down. I know there 
have been some press reports about trying to favor one region 
than another. That was not the case. We let the chips fall 
where they may. It was a trade disruption program, and if you 
remember the first year, we hadn't traded a lot of corn to 
China, so there was a big problem with how corn really 
responded to soybeans in that area. We took a different 
approach based on the feedback we got from you all and 
constituents across the country, and went to a per acre concept 
here that I thought was better received. It is, again, probably 
not perfect. Anyone can have a different, if you ask ten 
economists there, you are probably going to get 12 opinions 
about how this could be done in that way.
    [The information referred to is located on p. 86.]
    I thought we did a pretty good job in trying to respond to 
the marketplace, but the complaints about it being regional 
biased are just unfounded.
    Mr. Conaway. Well, I agree with you. I think the cherry-
picking a couple counties in two different states and trying to 
compare those is disingenuous by our Senate colleagues that 
have posited this issue.
    Secretary Perdue. I was sort of proud of the fact that the 
Chairman's Congressional district got more money than all the 
State of Georgia did.
    Mr. Conaway. Facts are a pesky thing. Facts are a pesky 
thing.
    The Chairman. Just doing my job.
    Mr. Conaway. Mr. Secretary, the gene editing and 
biotechnology advances that have the potential to transform our 
agriculture industry are facing some issues. With FDA saying 
that gene editing available traits is an FDA issue. In your 
discussions with producers, what challenges has the livestock 
community identified with the FDA's regulatory process, and how 
can we help you and the Administration resolve these issues?
    Secretary Perdue. Well, thank you for the question. This is 
an issue we have been involved in for a couple of years and 
interagency developments. We are actually making progress in 
interagency developments and conversation, moving to principles 
level between FDA and USDA in this regard, as well as moving it 
to NEC level and further if need be in trying to do that.
    These techniques, these biological techniques were not even 
thought about, contemplated in the 1980s when it was parsed out 
about how did it happen. We have done, at USDA, a good job on 
new plant technology and the part 340, the secure rule will be 
coming out about plants on non-transgenic type of gene editing 
will not be determined to be eligible for registration if they 
were the same types of things that could be done through 
natural breeding techniques.
    The same thing can happen with animals, and you know that 
we have already have some discoveries out here that could have 
animal diseases there. In plants, we can do things like peanut 
allergies and those kinds of editing. Non-transgenic: we are 
not taking other genes from other parts, animals, or plants in 
order to do that. But, we are making progress. FDA--honestly, 
if you want to know the truth, it almost comes down to more of 
a Committee jurisdictional issue than anything else, and that 
may be one way where you all can help in that regard with your 
colleagues over that. We do believe that the lost opportunity--
if these types of new techniques go to Argentina, Brazil, who 
already opened doors, Canada, China, other types, and we lose 
our edge in innovation, this is kind of the beginning of a long 
haul for American agriculture. There are things out there that 
are amazing, that are safe, that are healthy, and FDA intends 
to continue to develop these as drugs, and you know how long it 
takes to get drugs approved, and that is the challenge that we 
have. These are real-world opportunities that we have, and we 
will have a lost opportunity if we don't keep regulatory 
agencies up with the world.
    Mr. Conaway. Mr. Secretary, thank you for that, and thank 
you for the great work your team is doing. I know your FSA guys 
are overworked throughout this entire process, and I am just 
acknowledging from our side of the room that we certainly 
appreciate all their hard work on behalf of producers 
throughout the nation with all the work we put on them in these 
past 2 years.
    Thank you for that, and I yield back.
    The Chairman. I thank the gentleman.
    The gentleman from California, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman, and Mr. 
Secretary, we are always pleased to see you here and as you get 
around the country, and you do a good job, and we like you to 
continue to come to California. I know you were there last 
month, and we appreciate that.
    I have a couple questions here I want to go quickly on. Is 
there going to be a Phase 2 trade agreement with Japan, and 
will that include more agriculture commodities and SPS 
protections, and if so, when you and Ambassador Lighthizer are 
looking at that?
    Secretary Perdue. I think labeling this initial agreement 
with Japan as Phase 1, it means that there will be a Phase 2. 
Honestly, we got a pretty good deal in the Phase 1, about $7 
billion work in ag products in that area. Leveling these 
tariffs that would have been essentially where we were in some 
of the earlier agreements in that way, but making a significant 
difference in leveling the playing field for our producers.
    Mr. Costa. Do you think there is going to be a Phase 2 that 
is going to come?
    Secretary Perdue. I do believe there will, yes.
    Mr. Costa. And within the next year?
    Secretary Perdue. I can't tell you the timeframe on that.
    Mr. Costa. Okay. You also talked, since we are in Asia 
right now, and you talked about the Phase 1 of the China 
agreement, the President mentioned a number last month after 
the conclusion of the signing that seemed much higher than 
previous purchases by China in the past of agriculture 
commodities throughout the country. What is your realistic 
expectation now with the coronavirus? We have other issues. We 
have products that have been sent from California that are 
sitting in the ports. Their ability to get those products off 
the ports and maintain refrigeration and other factors are of 
concern. We have people going over there these days. You want 
to give us a quick summary?
    Secretary Perdue. Sure. The hardline numbers were $40 to 
$50 billion, which----
    Mr. Costa. Yes, I thought the President had $200 billion. 
That seemed a little----
    Secretary Perdue. That was a total deal; $40 to $50 billion 
was agricultural portion of that, $200 billion was the overall 
deal on Phase 1; $40 to $50 billion was the agricultural 
portion, which essentially doubles ag exports to China.
    We are encouraged. As I indicated, I think that the signals 
are they want to comply. We don't yet know what the effect of 
coronavirus will be on China or really the globe or 
economically here. But we see signals that they want to fulfill 
that commitment.
    Mr. Costa. Do we have USDA people over there trying to deal 
with the initial issues involving quarantine and the ability to 
ship product?
    Secretary Perdue. We do. We have----
    Mr. Costa. Do you want to keep the Committee informed of 
that effort?
    Secretary Perdue. We will.
    Mr. Costa. All right. I want to switch over to look at the 
MFP, the Market Facilitation Program and the data there, and I 
don't think California is in the top ten, and I want to know 
why more specialty crops haven't been included like citrus, 
stone fruit, berries, cashews, olives, tomatoes, that have had 
substantial losses to China and yet have not been a part of the 
Market Facilitation Program?
    Secretary Perdue. I think, again, the types of crops 
produced in California, it is a large export. I believe----
    Mr. Costa. Forty-four percent of our product.
    Secretary Perdue. If you check with your almond people, the 
last Market Facilitation Program payment included those 
specialty crops. The first one we did not, and those types of 
areas, as well as a purchasing program, they participated in 
that.
    Mr. Costa. Is the Department looking for expansion of 
additional specialty crops?
    Secretary Perdue. In which way?
    Mr. Costa. Well, there are ten right now, and there is a 
whole host of other, I mean, we grow a lot, as you noted.
    Secretary Perdue. Is it the Market Facilitation Program?
    Mr. Costa. Yes.
    Secretary Perdue. We don't have any plans to expand that. I 
think that that is over with.
    Mr. Chairman, could I get a little more volume on the 
hearing? I am having a little bit difficulty hearing the----
    Mr. Costa. I will try to speak a little louder, if that is 
helpful Mr. Secretary
    Secretary Perdue. Okay, thank you.
    Mr. Costa. Also, the efforts on the payments with Farm 
Service Agency continue to be problematic, it seems. We have 
people that have applied in 2019, and in some cases, 2018. We 
have continued to ask you folks and then locally with the FSA 
offices why they haven't processed in a more timely manner. Are 
we looking at bringing more personnel to expedite that?
    Secretary Perdue. We are always trying to hire, but I would 
love to know specifically if people have not gotten those kinds 
of payments in that kind of period of time.
    Mr. Costa. I would be happy to provide you a list.
    Secretary Perdue. Surely. Absolutely, and we will look into 
that.
    [The information referred to is located on p. 87.]
    Mr. Costa. In the areas that I am aware of.
    Secretary Perdue. Usually it is a matter of a lack of data 
information that we have to validate and verify.
    Mr. Costa. All right. I will yield back the balance of my 
time. Thank you very much. Keep up the good work.
    The Chairman. I thank the gentleman.
    The gentleman from Pennsylvania, Mr. Thompson, 5 minutes.
    Mr. Thompson. Mr. Chairman, thank you. Mr. Secretary, it is 
good to see you. Thank you for your leadership.
    Mr. Secretary, in your testimony it references the 
exceptional new challenges that farmers across the U.S. faced 
recently with unprecedented widespread natural disasters, 
floods, droughts, blizzards, and freezes. These disasters 
expose gaps in coverage and led to additional ad hoc 
assistance. What improvements do you think that we can make to 
crop insurance to make it even more effective in these disaster 
situations?
    Secretary Perdue. Well, I think I am going to have to tread 
very carefully. I think crop insurance does a great job as a 
general safety net. It does not contemplate catastrophic 
disasters like hurricanes and floods, frankly, and it can be 
used for droughts and those sorts of things. But, I don't know 
that we would want to develop a program as broadly as one that 
contemplated huge disaster programs.
    Mr. Thompson. This year, we hope to reauthorize the U.S. 
Grain Standards Act. Can you share with us the importance of 
the Federal grain inspection enterprise on our ability to 
market grain, both here and abroad?
    Secretary Perdue. I would love to. This is one of the 
issues where we are really having discussions with China right 
now, and frankly, our colleagues in the western hemisphere, the 
major producers of beans, China--this is one of the ways China 
has sort of harassed our shipments there, making sure we put 
weed seeds on the sanitary/phytosanitary list. That is a grain 
standard, not a sanitary/phytosanitary issue, and one which we 
are discussing with China as we speak about that. They put out 
an edict, they wanted to clear that.
    Grain standards are very important, just like any kind of 
food safety standards internationally, and we take great pains 
to try to agree internationally on those standards, and where 
everyone can be assured of what they are being judged by when 
they ship grain back and forth.
    Mr. Thompson. I want to thank you and your team for all 
your work and support for USMCA. This agreement holds, 
obviously, tremendous potential for U.S. agriculture, and for 
the dairy sector in particular, as we were kind of locked out 
of the Canadian market.
    To get the full benefit, though, it is going to be 
essential we know exactly how Canada and Mexico plan to 
implement their commitments. And with Canada, important details 
need to be finalized on dairy market access. In the case of 
Mexico, we need more clarity on how they will allow common 
cheese names.
    Since USDA plays an incredibly important role in working 
with the U.S. Trade Representative on all the fine print of our 
trade agreements, what is the Department doing to ensure proper 
USMCA implementation by our trading partners?
    Secretary Perdue. Well, 2 weeks ago I met with my Canadian 
peer, Minister Bibeau, and asked her were there any issues 
regarding the Canadian ratification of that. She expects that 
to be concluded very quickly with no changes. We are anxious to 
get all those moving.
    Geographical indicators, as you mentioned for cheese is 
something that we continually fight against internationally in 
that way. That is an EU plan over some of those names. They are 
trying to patent names that have been in the marketplace for 
many years, and we have had fairly good success with Mexico in 
accepting that.
    Mr. Thompson. Just changing one last gear here. The U.S. 
Forest Service maintenance backlog is more than $5.2 billion. 
It is the second largest backlog between the four Federal land 
management agencies. What steps is the Forest Service taking to 
minimize maintenance backlog for the Forest Service, and what 
is the Service doing to increase access to public lands and 
generate more revenue for our rural communities?
    Secretary Perdue. Right. What you all did already with the 
forest fire fix is the funding fix on that is one of the best 
things. We got in the backlog because we were having to take 
operational maintenance money there to suppress fire. What you 
did there beginning this fiscal year enables us to have a plan 
of maintenance there. When you look at the budget for this year 
too and the proposal you will also see backlog maintenance 
money attributed to that.
    We want to do that. Many of those are roads and bridges 
that address really the issue that you ask about, and that is 
public access. We want to make sure the public can get into 
these places. I don't want to see gates shut, because this 
closed because of maintenance and those sort of things. We also 
encourage a huge volunteer network and we have a lot of NGOs 
across the country that work with us on helping to improve the 
access through roads and bridges.
    Mr. Thompson. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    The Chairman. I thank the gentleman.
    The gentlelady from Ohio, Ms. Fudge.
    Ms. Fudge. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here today.
    Mr. Secretary, I represent one of the poorest districts in 
the United States. More than one in six Cuyahoga County 
residents lack access to nutritious food every day. SNAP 
provides critical nutrition assistance to nearly 200,000 people 
in Cuyahoga County, including 82,000 children.
    Unfortunately for poor Americans in my district and across 
the country, you and the Administration are actively working to 
finalize and implement three SNAP rules that will increase food 
insecurity and gut state flexibility--which I thought was 
something very important to you--to provide people in need with 
critical lifesaving food assistance. Altogether, roughly four 
million people would be kicked off SNAP, and nearly one million 
children will lose their automatic access to free school meals.
    The rules amount to about $19 billion in cuts to SNAP over 
5 years. This comes very close to the $22 billion handed out to 
ailing farmers impacted by a trade war that was started by this 
Administration.
    We can all agree affected farmers should be compensated. 
However, giving farmers billions in Federal assistance 
shouldn't mean taking those same billions from food-insecure 
people.
    It sounds to me like you are using administrative PAYGO to 
pick winners and losers, and pit food producers and consumers 
against each other. If the Administration can understand 
farmers are hurting, and we can, surely you can empathize with 
our nation's hungry.
    I ask where is your commitment to feed everyone?
    Just as concerning are reports that more than \1/2\ of the 
initial farm bailout funds were paid to the top ten percent of 
U.S. farmers. There are recent reports of payments going to 
farmers previously convicted or accused of fraudulently 
obtaining Federal agricultural subsidies. Now, if that is true, 
it is certainly concerning and irresponsible, but it as well 
may be illegal. Because as you know, as I do, Federal law 
requires farmers convicted of felony fraud to be temporarily 
barred from USDA programs. I would like to follow up with that 
with your staff, if you would have someone contact my office.
    Now to my questions. We are all monitoring the spread of 
coronavirus in the United States, which you, quite rightly, 
called a pandemic some time ago.
    On April 1, USDA is planning to implement a final rule to 
strip SNAP away from 700,000 people in need. Given the timing 
and the anticipated strain on our nation's food banks, are you 
willing to delay the implementation of this final rule?
    Secretary Perdue. No, ma'am, we have no plans to eliminate. 
We do have flexibility, though, if there is an outbreak here, 
to relieve those issues. But until we see that here, we are 
willing to move just as flexibly as we do in natural disasters. 
If there is a health emergency and a disaster, we will do that 
here as well.
    Ms. Fudge. Thank you. Last, certainly, I have made no 
secret of my concerns with your civil rights enforcement. The 
resignation of Naomi Earp presents an opportunity to you, to 
USDA, to show its employees and the people it serves that the 
Department is committed to overcoming its long history of 
discrimination.
    I understand that you have appointed Mr. Westil to head the 
civil rights office. As Chair of the Subcommittee responsible 
for oversight of the Department, I just want to be clear that I 
am going to hold him as responsible as we did Ms. Earp, and I 
certainly hope that your staffing will find itself in a 
position that raises morale, which the morale is at the bottom 
right now; that we will finally staff up the offices that are 
saying that they are thousands of people short; that we will do 
what the USDA is intended to do, and take care of the people it 
is intended to serve.
    Mr. Chairman, I yield back.
    The Chairman. I thank the gentlelady.
    The gentleman from Georgia, Mr. Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. Mr. 
Secretary, I was in the old governor's office the other day 
with Secretary Kemp, and when you said you got upset, I had a 
little bit of a flashback there to budget meetings. You were a 
great governor and you have been a great asset for the State of 
Georgia, and I am glad that you are the Secretary of 
Agriculture, and I appreciate your support of our producers.
    You mentioned the E15. I have just one thing I want to 
mention there. If E15 is going to become more prevalent in the 
marketplace, then the labeling standard needs to be put on the 
pumps that cautions people that if you put E15 in a marine 
engine or a chainsaw engine or a high performance engine, that 
you are absolutely going to destroy that engine. I have no 
problem with E15 being expanded. I do have a problem without a 
labeling standard that cautions the consumer that if put in 
certain engines, it will destroy that engine. And so, any help 
with that, I certainly would appreciate it as we work on the 
labeling.
    Secretary Perdue. That falls under the EPA, of course, but 
we are working with them. They have a fairly good strong skulls 
and crossbones on there but it causes a lot of things, and that 
is certainly one of those that needs to be included.
    Mr. Austin Scott of Georgia. While we are on labeling, it 
does concern me from our farmers' standpoint that we have non-
dairy products that are being marketed as milk. We have non-
meat products being marketed as meat, and we have non-rice 
products being marketed as rice. My wife tricked me into eating 
cauliflower the other night, and it was actually the best 
cauliflower I have ever had, although I don't intend to have it 
again.
    But, I do think that this is an area that we need to be 
very careful of as we push forward, and I do think that it has 
the potential to create some disruptions for the producers. 
With that said, as you know, I represent your hometown and you 
mentioned that farm income was actually up. I would be 
interested if you have any studies on that, and which regions 
and which commodities that it is actually up in. Certainly in 
our area where we have been hit by natural disasters and other 
things, we would be on the low end of the totem pole in that.
    But after watching the crop insurance and disaster 
payments, I have two suggestions. One is if there is any way 
for this year that we can find a way to include the value of 
the MFP in the price loss coverage, I think it would be helpful 
to our farmers and the lending institutions. I don't know that 
you can legally do it, but as you know as the commodity prices 
have come down, the value of the crop insurance is not there to 
cover the loans that the farmers have to obtain. And then in 
disasters, can we find a way to better integrate the actual 
loss data from the land-grant institutions into the disaster 
payment calculations? I know we can't just take a farmer that 
says, ``Hey, I had 3 bales to the acre,'' but we did have 
actual data from the land-grant institutions this year, and 
unfortunately we were not able to incorporate that into the 
loss data on the disaster payments.
    Any comments?
    Secretary Perdue. Well, we have to be very careful, 
obviously, in both the loss data, based on what many of your 
constituents wanted to have happen when they had the hurricane 
come in, they knew they were harvesting 3 bales of cotton to 
the acre. But insurance may not have covered that amount, and 
that is really, they did lose that because when they got back 
in, there was nothing left to harvest in that way. So, there 
were losses that way. It is very difficult, that is where the 
ad hoc disaster program comes in. That is what we are trying to 
address with that. One of the other challenges is, is that we 
don't think the taxpayer should support over 100 percent of 
loss, and that is----
    Mr. Austin Scott of Georgia. I agree 100 percent with that.
    Secretary Perdue.--where some of the other things come in 
that many farmers, they wanted to pay for that huge crop, and 
plus. And that is the challenge.
    Mr. Austin Scott of Georgia. We can never, never make 
somebody more than whole. That would destroy this support for 
the ag community throughout the country. I agree with you 100 
percent on that.
    I do have a suggestion as we move to write the next farm 
bill over the next couple of years is that if there is a way in 
working with the Risk Management people in your office that we 
are able to create a harvest-type contract where if that 3 bale 
per acre crop is on the ground and the farmer was only able to 
insure 1 bale per acre because of historical averages. That if 
we have the data from the land-grant institutions, and it has 
to be appraised before they can insure it. That we allow them 
to have some type of step-up coverage prior to harvest once the 
crop has been produced.
    Secretary Perdue. I am asking our RMA leader, Martin 
Barbre, right now on disaster losses, how do we adjust that for 
pricing and yields. That way we are looking at--I don't know 
how much legal flexibility we have in that way in looking, but 
I understand what you are saying. I understand the challenges 
from the producer's perspective. We want to be as flexible as 
we can.
    Mr. Austin Scott of Georgia. One quick suggestion on that 
would be to allow them to cut out more of the bad years, might 
allow them to insure more of the yield.
    With that, Mr. Secretary, I appreciate you and I appreciate 
our friendship, and what you do for the country and the State 
of Georgia, and I have to get to an Armed Services meeting.
    The Chairman. I thank the gentleman.
    The gentlelady from Connecticut, Mrs. Hayes.
    Mrs. Hayes. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. I know there is a 
lot we are talking about on the Committee, but when I have the 
Secretary in front of me, I have to talk about what is 
important to me and my constituents.
    I looked, and you mentioned several of your Department's 
proposals to gut SNAP benefits in your written testimony that 
was submitted to the Committee, yet there is no mention that 
the President's budget request for Fiscal Year 2021 revived 
your previous proposal to take away benefits from households 
and replace them with what you are calling Harvest Boxes of 
pre-selected nonperishable food items.
    My question to you is, do you think that SNAP recipients 
are incapable of choosing groceries for themselves or their 
families?
    Secretary Perdue. No, we do not, in answer to your 
question. This is a proposal we have suggested. We think we 
would still like to have an opportunity for a pilot. As you 
know, many of your constituents and others are getting their 
food delivered at home, which would be essentially the choices 
that we would hope to provide in a Harvest Box.
    Mrs. Hayes. Yes, I saw that this was being compared to 
programs like Blue Apron. I doubt that that is what it would be 
like, but there is little or no evidence that this proposal 
would lower costs for the USDA or the American taxpayer. In 
reality, the proposal is likely more expensive, when you 
consider cost burdens on states, and it will cost $2.3 billion 
in grocery sales and $368,000 in grocer jobs.
    What I can't find is how this plan would be implemented, so 
I guess I am going to ask you if you can expand on how this 
program would be delivered? Have you thought about who would 
deliver the boxes, or what would we do in the event that a box 
got lost or stolen, or are there plans for delivery in the wake 
of a disaster, or a storm? In my area, we have many winter 
storms. How would we deliver benefits to people who don't have 
an address? Has the Department investigated any of those 
avenues in what you call a pilot?
    Secretary Perdue. Yes, we spent a good bit of time on many 
of that. You know that in many ways, obviously when food is 
delivered at home, the statistics over that, the delivery 
mechanism, the logistics being developed in that way----
    Mrs. Hayes. No, I don't know, that is why I am asking you; 
can you explain how this program would be implemented, or just 
if you thought about how that would take place?
    Secretary Perdue. We have thought about that, and I would 
love to have an extended conversation with you about that. I am 
not sure this is the way to do that, but this is the place to 
do that. But, there was a lot of study put into that about the 
home delivery there, giving people a choice, maybe an app on 
their phone of the groceries they wanted delivered there, and 
using commercial distributions. We are working with both Amazon 
and Wal-Mart and others who expressed great interest in 
utilizing these services.
    Mrs. Hayes. Is this information anywhere where I can access 
it, because I spent a lot of time trying to look up the details 
of it and I can't find it.
    Secretary Perdue. I would be happy to have our FNS people 
deliver to you what we discovered, yes.
    [The information referred to is located on p. 88.]
    Mrs. Hayes. Is it available anywhere, or do you have to 
individually request it, because I am sure other people would 
like to see the same information?
    Secretary Perdue. I don't know if it is, we want to be 
responsive to you, Members of Congress. I am not sure of the 
kind of depth of questions you ask, whether that information 
and extensiveness is out there or not, but we can provide it 
and if you want to make it public, then that would be fine.
    Mrs. Hayes. Well yes, I guess I am asking then can you 
provide it, because this is a plan that has been introduced 
multiple times in multiple budgets. I would imagine that the 
way it will be implemented should be well thought out and 
thoroughly investigated at this point. This isn't the first 
time this came up in a budget.
    Secretary Perdue. The first time? I think it has been in 
three budgets.
    Mrs. Hayes. Exactly. That is what I am saying. This has 
been in multiple budgets.
    Secretary Perdue. We appreciate the opportunity to 
implement it, and will give you all the details you need.
    Mrs. Hayes. Our role is to look at the plan for 
implementation before it happens, not after. Again, if you 
could just--I would love that. I will have my office follow up, 
but if you have it, I would imagine you have it planned out to 
the letter now, since it has been introduced or proposed in 
three separate budgets, so it is something that has been going 
on in an ongoing conversation for many years, so I would like 
to see it so that I can share it out.
    Secretary Perdue. Sure.
    Mrs. Hayes. And just as part of that, I would ask you for 
specifically how you would address people with food allergies 
or medical needs if these are generic, pre-selected boxes that 
would be going out?
    That is all I have, Mr. Chairman. I yield back. Thank you.
    The Chairman. I thank the gentlelady.
    The gentleman from Arkansas, Mr. Crawford.
    Mr. Crawford. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here.
    You touched on something earlier. I think my friend from 
Pennsylvania brought this up, the Grain Standards Act and how 
that impacts trade and so on, and you mentioned sort of the 
overlap between our grain standards and phytosanitary/sanitary 
considerations.
    That brings me to the question: I kind of got asked this on 
behalf of my rice farmers. We have been talking about importing 
or exporting, rather, to China for 20+ years, and we have yet 
to export any rice to China. All of it tends to come back to 
this sort of moving standard that they have there. I wonder if 
you could maybe provide a little more insight into where we 
stand today, what the potential is for us to actually move some 
rice into China at some point in the near future.
    Secretary Perdue. Based on the Phase 1 agreement, 
Congressman, I am pretty optimistic we will get rice in to 
China. Those non-tariff trade barriers were some of the things 
I was referencing earlier that we are dealing with from a 
technical level. That is the kind of harassment that we have 
had in that regard, and rice would be included in that. It was 
obviously one of the commodities that was anticipated, and it 
would be a great market that hadn't been available in rice. We 
are looking forward to that.
    Mr. Crawford. Excellent. Let me change gears a little bit. 
I have some concerns about the aging population of our farm 
producers. We talk about the aging workforce, but I really want 
to focus on the actual producers where we see the trajectory is 
not going in the right direction with regard to the age of our 
actual farmers. A few weeks ago at the USDA outlook conference, 
you highlighted innovation in the future of ag producers and so 
on. That has to be a consideration. I am wondering what we can 
do here in this body to assist you in helping us to change the 
trajectory and getting more young people engaged in the 
production side of agriculture?
    Secretary Perdue. Honestly, the real answer to your 
question is young people are smart. They do what is in their 
economic best interest. I think the profitability of 
agriculture needs to show them a bright, promising future, 
where if they put their efforts into farming, they can have a 
lifestyle like their colleagues that choose to go to town and 
work. So, that is the ultimate answer there.
    You have put programs in for beginning and new farmers, but 
ultimately, we talk about sustainability a lot. We are talking 
about environmental sustainability, social sustainability of 
available and affordable food, but there is also an economic 
sustainability. We can't expect farmers to come into the 
business and not being able to make a livelihood like they 
could. We know that the average income of farmers is not 
comparable to many other jobs in that way.
    Mr. Crawford. Well, given the cost of doing business and 
what the return on that investment is, it doesn't make for a 
very attractive opportunity for young people, and so we have 
talked about policy and what the Federal Government can do to 
incentivize young people for years. It is nothing new. We have 
talked about this for a long time, and I don't see that we are 
doing anything right here in regard to that. We are still 
seeing that struggle take place. I haven't seen any measurable 
improvement in that. Are there things that we can identify 
that, from your perspective that you could say, ``Stop doing 
that. Don't do that anymore, because it is not helping.'' 
Because, I know it is a market-based, market-driven largely. I 
just kind of want to get your insight on that. Lessons learned, 
what we can we do differently?
    Secretary Perdue. Let me tell you one of the things I think 
you all did positively that helped. You readjusted the CRP 
payment limits or per acre this year. That was really keeping a 
lot of young farmers out of the business. Senior farmers are 
using that kind of as a retirement program and rather than 
letting their farm be utilized for productive agriculture for 
the next generation. So, that is one of the things you all did 
that will help in that regard. We had complaints about that and 
we addressed that together.
    Mr. Crawford. Ironically, that wasn't geared toward trying 
to address the young farmer. It is just a byproduct of having 
done that, correct?
    Secretary Perdue. That is right.
    Mr. Crawford. Again, I know that we kind of struggle with 
this because we are trying to do the right thing by the next 
generation, but sometimes it doesn't manifest that way in 
reality. And so, I agree with you. We just need to take more of 
a market-based approach to help drive young people into the 
business. But, the market needs to catch up with us on that at 
some point, but there are limits, obviously, in what we are 
dealing with now with regard to trade is probably as much of a 
factor as anything, wouldn't you say?
    Secretary Perdue. We did see a lot of bright young people 
come back into agriculture that might have been born there, 
went off to town in those periods of years from 2008 to 2014. 
They came back. Their fathers and mothers said, ``We feel like 
we can support another family member here, another family 
group.'' We saw them come in. Honestly, sadly, those are the 
ones that are hurting the most from the downturn since that 
period of time.
    I kind of go back to the original thing. It is a 
macroeconomic issue. Farming is tough. It is risky and it is 
tough. It is a tough life. You almost got to be committed to it 
in a different way, but productivity is the key. Ag innovation 
is the key. Those are the things that we are doing----
    Ms. Adams [presiding.] The gentleman's time is up.
    Mr. Crawford. I guess I am done. Thanks.
    Ms. Adams. Thank you very much.
    Mr. Delgado, the gentleman from New York, you are 
recognized for 5 minutes.
    Mr. Delgado. Thank you, Madam Chair. Secretary Perdue, it 
is good to see you.
    During our last Committee hearing in February of last year, 
you may recall that I asked you what could be done to improve 
the plight of small family farms, especially dairy farmers 
whose numbers have been in decline for many years? And in your 
answer, and I want to quote, you said: ``These are economy-of-
scale issues that impact the entire economy, not just 
agriculture. And the economy-of-scale for a small dairy is 
going to be extremely difficult going forward, even with the 
new farm bill. I don't think any of us would submit that we are 
compelled to keep anyone in business if it is not profitable.'' 
Since that conversation, the situation has become very dire, 
more dire, as evidenced by the trade aid. In 2019, we saw the 
largest decline in dairy operations in more than 15 years. I 
believe that priorities dictate policies, and when it comes to 
your agency's priorities, I am concerned that we are not seeing 
the kind of recalibrating needed to prioritize and assist our 
small farms.
    My question is what, if any, plans is the USDA considering 
to provide assistance to, and create new market opportunities 
for, our small family farms?
    Secretary Perdue. What we see most effective is value-added 
grants, that we see the dairies that are surviving, 
particularly the smaller dairies are more successful when they 
add processing there and creameries. We have been losing dairy 
farms for a number of years. Sadly, the cows or number of cows 
and number of dairies are down, but the milk production is up. 
That is really the challenge. That is why we see the continued 
price pressure that makes it very difficult for smaller 
dairies.
    I was visiting with the organic dairy providers the other 
day, and many of them have small producers. There is a large 
organic dairy co-op that has a lot of smaller producers, a lot 
of cows, herd number under 75, which is a very small dairy 
today. They are taking those kinds of actions to do that. The 
fact remains that the economy-of-scale with equipment, land, 
cows, and others, it is a very difficult economic challenge to 
do that. I thought you all did a good job in the Dairy Market 
Coverage Program, in the farm bill by skewing that to smaller 
dairies and giving them up to 5 million pounds of milk, and 
aside from that, it is that other types of programs were open 
to those, and we are trying to fulfill that. But it is a 
difficult life.
    Mr. Delgado. Thank you.
    You mentioned your visit to an organic dairy farm, and I 
just want to flag for you, and I am interested to get your 
thoughts on this. The proposed budget by the Administration 
reduces funding for the National Organic Program. It also cuts 
more than $25 billion from crop insurance over the next 10 
years, and reduces funding of the Agricultural Conservation 
Easement Program as well. Do you believe this is consistent 
with supporting small farms and dairy farms?
    Secretary Perdue. Well, again, overall budget is work. It 
is proposed to you all. You know that you all, the 
appropriators, the President makes and presents his budget that 
way, and you all have been kind in the past to do that. We 
think certainly some of those programs that I mentioned, the 
organic program has been the lifesaver for many small dairy 
farms. Obviously, not everyone can participate in that. We are 
taking----
    Mr. Delgado. It wouldn't be helpful, though, it sounds 
like. If you are saying it can be a lifesaver, then it probably 
wouldn't be helpful to reduce the funding around it?
    Secretary Perdue. I think it would be helpful to have those 
programs.
    Mr. Delgado. Right. The other piece that I want to just 
clarify is the trade aid. The reports, while they might not be 
regionally biased, from what I understand, and I appreciate the 
map that you provided. There does seem to be a bias for large-
scale operations and some of the more wealthier farms, and I am 
curious to what extent anything is being done to offset that 
imbalance?
    Secretary Perdue. What you all did in the farm bill as well 
as continuing that we did, the price gaps. The facts of the 
matter is, is that the larger farmers farm the probably 50 to 
60 percent of the land and produce about 75 to 80 percent of 
the products in the United States.
    Mr. Delgado. Would those farmers be profitable but for the 
trade aid in 2019?
    Secretary Perdue. Many of them would not.
    Mr. Delgado. Right, but then you said----
    Secretary Perdue. It is like the bigger you are, the harder 
you fall.
    Mr. Delgado. Understood.
    Secretary Perdue. The losses would be----
    Mr. Delgado. But to be clear, you are on record saying that 
keeping farms in business that aren't profitable is not really 
the focus, right?
    Secretary Perdue. Say again? I am sorry.
    Mr. Delgado. You are on record, I believe you said you are 
not compelled to keep anyone in business if it is not 
profitable.
    Secretary Perdue. Again, we have to recognize that farming 
is a business, and you have to make a profit. That is what my 
answer to the question was. The profitability of agriculture--
--
    Mr. Delgado. I totally understand. I am saying that as you 
make that decision, it appears that you are prioritizing the 
big farmers over the small farmers who aren't making a profit.
    Secretary Perdue. I would disagree with that. We are at no 
bias toward large or small. It is a matter of fact that the 
larger you are, the more you are eligible for those payments.
    Mr. Delgado. That is my time. Thank you.
    Ms. Adams. The gentlelady from Missouri, Mrs. Hartzler.
    Mrs. Hartzler. Thank you, Madam Chair, and thank you so 
much for mentioning the ``Show Me State,'' Missouri. I couldn't 
agree more that it is really important that we trust but verify 
these trade agreements, and I am really excited, though, about 
the potential there, and appreciate all the work of the 
Administration and you and your support for helping expand 
that.
    One of my colleagues, Ranking Member Conaway, asked a 
question already that I was going to touch on about gene 
editing, and I wanted to just, I guess, foot stomp what you 
both have said about how important this is that we get this 
right, and make sure that the United States keeps this 
innovation capability.
    I represent the University of Missouri, and you have 
probably heard of Dr. Randy Prathers' research where he has 
developed a PRRS resistant pig and how important that is that 
we get that through the process where we are able to replicate 
that and to take advantage of this innovation and this hold up 
between the FDA and the USDA is just really critical that we 
get this moving forward.
    Do you have any more you want to add on that before I go to 
another topic?
    Secretary Perdue. Well you mentioned one. I didn't use that 
example earlier, but just think, we have seen the devastation 
of African Swine Fever. What if we genetically edit a swine 
that was resistant to African Swine Fever? We think there is a 
huge, once the regulation catches up with the biotechnology 
here, we think there is a lot of potential out here for making 
actually food therapeutic, actually medicinal type of food, 
healthy, safe, nutritious food for our populations.
    Mrs. Hartzler. That is exciting, especially with the 
challenges we have the high costs of prescription drugs and the 
old way of addressing things. If we can prevent it just by the 
food we eat, that is just revolutionary.
    In the 2018 Farm Bill, I passed the Community Facilities 
Lending Provision to increase the threshold for the community 
facilities and the water waste programs to population of 50,000 
people to allow more of our small communities to be able to 
access these funds. Can you tell me if the Department has yet 
made any loan guarantees to the newly eligible communities 
under this program?
    Secretary Perdue. I cannot tell you definitively. I believe 
that we have. We were anxiously awaiting that expansion there. 
We had a lot of demand----
    Mrs. Hartzler. Right.
    Secretary Perdue.--in communities that exceeded the 10 and 
$20,000, 20 person population limit, and I would assume that we 
have. I can't definitively tell you that, but we can get you 
the number of people and the populations that we served.
    Mrs. Hartzler. That would be great, and if you could also 
get me more information about when they can apply, those new 
communities. That is exciting. That would be great.
    [The information referred to is located on p. 89.]
    Mrs. Hartzler. We had a discussion a little bit with 
another colleague, G.T. Thompson, about crop insurance and 
flooding and disasters. Of course, being from Missouri, we had 
a lot of flooding of the Missouri River. We have a lot of 
levees that had breaches, and we are not going to be able to 
get all of those levees repaired by spring planting season. 
Farmers are making efforts to try to repair them on their own, 
and making some temporary filling of the gaps. But are you 
aware, is there going to be any flexibility in the crop 
insurance to allow for partial repair of a levee or something 
to help give a range of crop insurance products so that perhaps 
they could afford something, and incentivize them at least to 
plant something in the next couple of weeks?
    Secretary Perdue. I am not aware of anything within the 
crop insurance realm. I know that through NRCS and the EQIP 
Program and those types of damage programs there that we are 
trying to address what farmers' needs are when they are facing 
those levee breaches.
    Mrs. Hartzler. Okay. That is something we need to work on, 
for sure.
    Renewable fuels are very much a win-win for our country, 
win for our farmers, win for our consumers, win for America, 
and win for the environment. And I applaud your goals regarding 
sustainability where you talk about the economic 
sustainability, environmental sustainability as well. I like 
also what you have done regarding the ethanol grants, $100 
million for the new infrastructure program to help with the 
E15, B20.
    I was wondering, can you provide additional information on 
how you think the biofuel sector can contribute to reducing 
environmental footprint that we have in this country?
    Secretary Perdue. Well, I know there has been some data 
that is out that we believe is inaccurate. But our latest 
information and research shows that the contribution of ethanol 
and biofuels, obviously lower greenhouse gas emissions and is 
good for the environment. That was one of the original purposes 
as far as American-grown fuel as well.
    Mrs. Hartzler. Absolutely. Well, I appreciate all your 
work, and I yield back.
    Secretary Perdue. Thank you.
    Ms. Adams. Thank you very much.
    I now recognize the gentlelady from Virginia, Ms. 
Spanberger.
    Ms. Spanberger. Thank you very much, Madam Chair.
    Secretary Perdue, ahead of these hearings, I reached out to 
producers in my district in central Virginia, and I asked them 
how they felt that the rural economy is working for them. And 
resoundingly, the answer that we heard was it is not. Our 
farmers are continuing to struggle with the loss of market 
access abroad as a result of our trade war with China.
    One of my constituents who I see fairly regularly, a 
soybean farmer, large family farm, conveyed to me that despite 
the recent U.S.-China Phase 1 agreement, he had little 
confidence that the agreement would provide meaningful relief 
to him and his family. He literally said it was too little, too 
late. And he felt that all the decades of time and money spent 
by farmers like him in his community, building business 
relationships and partnerships in China had been thrown away 
and as he called it, ``irreparably harmed.'' Today, he is 
finding that the buyers who used to buy his product have 
developed new relationships in Brazil and Argentina, and they 
don't seem ready to abandon those. He is afraid that he won't 
be able to get his business back.
    My question is, I understand that USDA may be unable to 
repair the damage done by this trade war, but as we think about 
the purchase commitments agreed to in the U.S.-China Phase 1 
agreement, what role do you see USDA playing in monitoring 
China's compliance to ensure that farmers at last have the 
chance to receive some relief as they work hard to try and 
rebuild relationships and gain back some market share?
    Secretary Perdue. Well, first of all, I am much more 
optimistic than your producer there. Again, we will regain 
those markets and USDA's role is to monitor that. As I said 
earlier while you weren't here, we are going to trust but 
verify. We think these agreements that were signed were hard 
numbers that are enforceable, unilaterally enforceable, and our 
role is to provide the Administration, USTR, Commerce, and the 
President with how we are coming on that. What is that data? We 
have the ability to track the shipping data, the export data. 
Some of it lags sometimes a month, but that is what we will be 
doing. And also, I mentioned prior to your coming in was that 
we see good, encouraging signs of China doing things underneath 
from a technical resolution of some of the non-tariff trade 
barriers that are encouraging.
    We are hopeful. We are optimistic. We believe that China is 
a shrewd consumer. They are going to buy where the best deal 
is. This time of year, they buy soybeans from Brazil. We think 
they will come into this market in late spring and summer and 
fulfill the commitments, but we will be looking.
    Ms. Spanberger. And here, this particular producer that I 
am talking about is a family farmer who has been farming in one 
of our counties for decades. His family continues to farm, and 
he himself is in his late 70s. I would make the position that 
my answer to him as his Representative in Congress can't be 
that he needs to be more optimistic, because he is seeing the 
day-to-day results of this trade war, as are other farmers and 
producers across our district. And he was talking about this 
year as he was filing his taxes. He was troubled by the fact 
that on his schedule F, the government payouts he received 
exceeded the profits that he made. He doesn't want payouts. He 
said his friends don't want payouts. He wants a fair shot. He 
wants open markets. He has worked for decades to build up 
relationships and have the ability to compete internationally. 
But he has a growing sense of insecurity and uncertainty, and 
so, I would ask when we are moving forward that we please 
ensure that we have a level of strategy recognizing that we 
need a lot more than optimism to help our farmers and 
producers, particularly our small family farmers.
    Secretary Perdue. Ma'am, I think the trade as it develops 
will create optimism. I didn't indicate that, you can suggest 
your producer become more optimistic. I said I am more 
optimistic about that, based on what I know. I would really 
seriously doubt that if he has developed personal relationships 
of people buying soybeans in China--we have done a great job as 
an industry. We think that market is going to come back based 
on what we are seeing already, and I am more optimistic about 
that.
    Ms. Spanberger. And sir, I am a former CIA officer. I 
worked in national security. One of the tenets of everything we 
ever did was contingency plan for the absolute worst case. And 
so, is USDA planning for the absolute worst case if these 
markets don't come back?
    Secretary Perdue. I think that was the essence of the 
President's tweet where he said if the trade does not develop 
as we expect and hope that it will, then I am willing to 
support the farmers with another round of MFP payments. That 
was a big if. I am telling farmers, let's plant for the market, 
hope for the trade and pray for the trade to come back as we 
think it will. But if it doesn't, the President is willing to 
support any kind of trade disruption.
    I also said that these Market Facilitation Program payments 
are not price support programs. They are market trade 
disruption programs, and the farmers need to plant for the 
marketplace.
    Ms. Spanberger. In planning with the if and the tweet that 
you mentioned, that is, from my perspective, kicking the can 
down the road. That is not planning for what happens when they 
don't come back. That is delaying what might be the worst-case 
scenario.
    I thank you for being here today, and I yield back.
    Ms. Adams. Thank you very much.
    The gentleman from Georgia, Mr. Allen, you are recognized.
    Mr. Allen. Thank you.
    Mr. Secretary, good to see you today, and thank you for 
coming down to the district and announcing that a grant for $5 
million, USDA grant for our broadband in Evans and McIntosh 
Counties. That was a great event. I wish I had brought a big, 
heavy coat, maybe two or three. I could have shared them. The 
temperature at this event, it dropped from like 48 to 28 
during the hour.
    But anyway, that was a big deal. Thank you for doing that.
    I am going to start off with pecans. Obviously, we are the 
top state in pecan production, and that industry is vital to 
Georgia and our economy. The pecan farmers have been unfairly 
targeted by the tariffs in India, and currently there is a 36 
percent Indian tariff on U.S. pecan imports. India does not 
produce pecans, and we have written the U.S. Trade 
Representative on the pecan tariff and discussed with the USTR 
team, but it would be helpful if you could help assure us that 
it is on the U.S. list of tariffs to be removed during our 
trade negotiations with India. And would you consider doing 
that for us?
    Secretary Perdue. I can verify that it was on the list. In 
fact, Ambassador Lighthizer had presented a list of options to 
the President, who determined that it was not a big enough kind 
of deal, and he believes that as he has been successful in the 
past, using the leverage of his office there will be a better 
opportunity for India. You know that India has been a very 
tough export market for the United States with very unfair non-
reciprocal trade barriers there. We hope to have some better 
news in that market.
    Mr. Allen. Well, obviously one time I had the President's 
ear on the whole China thing, and because the Chinese were 
being so unfair with how they were dealing with us that I 
recommended that he go to these other countries and let's see 
if we can work with countries that will promote fair trade.
    The other big issue in the district is labor, the H-2A 
program, and I constantly hear from producers about the 
inability to find labor on their farms. Many use the H-2A visa 
program, but it is frustrating. It is complex. It costs a lot 
to participate in the program. I know that you have worked 
diligently with the Department of Labor on regulatory reforms 
of the H-2A program. Where are we with those reforms, and what 
are some of the other problems with the H-2A program that you 
have identified where Congress needs to get involved and do 
some type of legislative fix?
    Secretary Perdue. Well, labor obviously is really the 
number one and number two issue with trade all over the 
country, and it is time we separated the immigration issue 
where people want to come to a country and become citizens with 
an economic labor issue of where they want to come for economic 
opportunity to help grow our economy. I think those two have 
been conflated for too long, and that the challenge has been 
the people fear that people who want to come on a temporary 
basis, such as H-2A workers, are looking for immigration, and 
that is not the case at all. Again, the Labor rules are at OMB 
waiting to be certified there to be able to put out. It will 
help to modernize that, but Congressman, there is still the 
issue of really this adverse wage rate has become a perverse 
wage rate in agriculture. We essentially have--in agriculture, 
a $15 minimum wage there where we don't anywhere else in the 
economy.
    Mr. Allen. Yes, sir.
    Last, and I have about 54 seconds, so we have to make this 
quick, but you recently traveled to Europe. As far as trading 
relationships with Europe, European Union, and UK, and there 
are real concerns here in the U.S. on which they say a blatant 
disregard for science. The EU has said in setting their 
policies, from your perspective on your trip, what are the 
biggest sticking points to U.S. trying to negotiate deals with 
Europe on particularly peanuts and things like that?
    Secretary Perdue. Well, the European culture has sort of 
denigrated American food as unsafe. We are giving them the 
facts based on sound science about that. They talk about 
chlorinated chicken. We really don't do that at all. We use 
other products there, and our food safety record is better. How 
do you change the mind of people who have an opinion? It is 
almost like an ideology of religion, but we are continuing to 
use sound science. And I think the future is better for the UK. 
We are looking forward to going and having a free reciprocal 
trade with the UK once they are out of the EU, which then will 
facilitate better relationships with the EU.
    Mr. Allen. Thank you for your service, sir. I yield back.
    Ms. Adams. Thank you very much.
    I want to recognize now the gentleman from California, Mr. 
Cox, you are recognized.
    Mr. Cox. Secretary Perdue, thank you so much for being here 
today, and certainly thank you so much for making it out to the 
Central Valley of California. You are always welcome there.
    On a particular note, I really want to say thank you and I 
appreciated your willingness to work with me to implement the 
needed changes to the Pima Cotton Competitiveness Program, 
which is providing much needed relief and support to the pima 
cotton producers, certainly in my district.
    But in the last couple of days, we have been hearing about 
staffing shortages at the county FSA offices across the 
country, and certainly in my district it is no exception. My 
staff has been working with local farmers unable to access the 
critical farm programs, and certainly the lack of staff at 
these offices is consistently being brought up as the reason 
for the delay in service and payments. I have, frankly, grown 
very concerned since my time here in Congress with the decline 
of staff morale at the USDA, the relocation of core offices, 
and reports of understaffing at the core USDA mission areas.
    And so, given the expressed commitment to excellent 
customer service, I mean, I would like to hear what you plan to 
do to ensure that USDA is filling these crucial positions and 
is seen as a desirable place to work.
    Secretary Perdue. Very good question, and I want to commit 
to you, we want to hear from you when you have service level 
problems within any district here from any Member. This has 
been a very frustrating situation for us. With an unemployment 
rate of 3.5 percent, I never thought we would have as much 
difficulty hiring people to the Federal Government as we have. 
And it is not because of a lack of effort. It is a very onerous 
onboarding process. We have been given some direct hiring 
authority, which enables us to do a quicker onboarding job, and 
we hope to fulfill that.
    But I can tell you, this has been a very--we talk about it 
almost every week. It has been a very frustrating problem 
trying to find through the Federal system workers to come into 
there. We find that when they apply nationally, they don't want 
to move to a particular area. When they apply from California, 
they don't want to go to the East or vice versa. So, the local 
hiring authority will enable us to help fulfill these sooner.
    Mr. Cox. All right, and more in a global sense, we have an 
Administration, certainly when they first came to office, one 
of the first things they did was implement a hiring freeze. And 
then they issued a directive about reducing the size of the 
government workforce, the Federal workforce through attrition. 
And so, that seems to be at odds with the intent to hire more 
people at the FSA or the USDA. And so, how does that reconcile?
    Secretary Perdue. I have had no such directions at USDA. We 
have hiring levels. We have had some funding issues, frankly, 
on the FSA issue, so some of the budget issues that were 
addressed last year and in this budget recommended will help. 
But we had some limitations. NRCS has been more of a difficulty 
finding people, but there were some budget cap issues on the 
hiring process that slowed us down on the FSA people.
    Mr. Cox. Well, sir, just to be clear, the agency reform 
plan, which was supposed to detail workforce reductions through 
attrition, that is not something that USDA is looking at or 
implementing?
    Secretary Perdue. No, we have a hiring plan that continues 
to move, and as I said, one of our principles is customer 
service. You have to have the people to do that.
    Mr. Cox. All right, and so I guess just in a general sense, 
USDA, we want more employees? We would like to grow that 
workforce?
    Secretary Perdue. We want enough people to get the job 
done. I don't want more or less. I want enough people to get 
the job done. That is what our----
    Mr. Cox. And right now we don't have enough though?
    Secretary Perdue. We are not having enough in some places. 
We have an optimum office production that tells where the 
workload is, and who needs to be there.
    Mr. Cox. And do we have metrics from that optimum office 
yet to detail how well that is working?
    Secretary Perdue. We do.
    Mr. Cox. That would be great to see. Thanks so much.
    [The information referred to is located on p. 89.]
    Mr. Cox. I want to reiterate what Congressman Costa was 
saying, which is trade is so vitally important to my district, 
and the Phase 2 trade deal with Japan is just such a promising 
market, especially for the specialty crop sector. And so, can 
you just expand once again on what the USDA is doing to help 
open and expand those markets?
    Secretary Perdue. Well certainly.
    Mr. Cox. My last 20 seconds.
    Secretary Perdue. Japan, obviously, which is a good 
destination from your State of California there, and $7 billion 
more in agriculture, many of the products, almonds and other 
products of the variety of products you all grow there is going 
to be beneficial. Also, the Korea market, Korea agreement on 
rice for your California premium rice is also a big benefit in 
the Korea agreement.
    Mr. Cox. Great. Thanks so much, Secretary. Always great to 
see you.
    Secretary Perdue. Thank you.
    Ms. Adams. Thank you.
    The gentleman from Illinois, Mr. Bost, you are recognized.
    Mr. Bost. Thank you, Madam Chair.
    Secretary Perdue, first off, thank you for what you have 
done with the agency, and also for being in our own district 
and mine and Rodney Davis's over the times you have been there. 
I also want thank the Administrator of the RMA, Marty Barbre, 
for his work with FAC and NFAC issues that affect double-
cropped soybean growers. It was an issue last year. We were 
able to work through it, and the insurance agents now can move 
with more clarity on how to better serve their clients with 
that double crop.
    Last year, crop reports sent the markets tumbling, because 
of the inflated claims of acres planted for corn and soybeans. 
Can you explain NASS's process behind the reports, and 
additionally, why would that report exist if the FSA already 
has the reported number of acres for each crop?
    Secretary Perdue. Well, they are two different reporting 
schemes. One lags another. The FSA reports acres by what 
farmers come into it. NASS has a consistent protocol of 
assessment over acres, going forward.
    One of the issues with the farm complaints last year is 
that one of the reports in the middle of the summer last year, 
the market expectations were far off from what NASS had 
developed, and it caused the prices to go down because of the 
expectation with the wet weather, wet spring, and prevented 
plants. At the end of the day, Congressman, NASS got it better 
than the market did, and that is the end of the story there is 
that we can't control what the market expects there, and what 
they trade on. And when the market goes down because when they 
see the NASS numbers, they realize they may have been too 
optimistic, and that is what happens.
    Mr. Bost. Well, thank you for that.
    I want to go back to where there was a statement made 
earlier, and I want to let you know what somebody brought up to 
me about how their farmers were feeling in their district. Let 
me tell you how my farmers are feeling in my district.
    As this trade thing started with China, here is what they 
told me early on. And you and I had this conversation. They 
told me that they believe it had been a long time coming with 
China, and that trade negotiation had to occur. They didn't 
want it to last too long. They wanted to get through it as fast 
as possible. I believe one of the problems, and they do, too, 
was the fact that the trade negotiations on the USMCA was 
actually because it took so long for it to move through this 
House being held up by leadership that it actually gave the 
President and the Administration trouble in negotiating the 
China deal, and that is what slowed that deal down and that is 
what caused a lot of the problems in the market at that time. 
It is kind of amazing we sit in these rooms and we watch and 
how somebody--if you just say something long enough that isn't 
true, it automatically becomes true. I want to thank you for 
what you do in your office and what we have been doing.
    The concerns we have every day with the markets is because 
we know that farmers work off of each other. Each year, they 
are worried about too much rain, not enough rain, what are the 
markets going to do, and the concerns they have. It is natural, 
being in agriculture, that you have a fear. That is life. That 
is what it is in ag. But I am going to tell you this. I don't 
know about the other Members here that were asking questions, 
but I can tell you this. Our farmers know that we are trying to 
do everything we can for them, and the Administration is doing 
that, and they are very happy with that. And the trade deals 
are going to help tremendously with the farmers, and it is 
looking very, very positive from here on out.
    I thank you for being here today, and I yield back.
    The Chairman [presiding.] I thank the gentleman.
    The gentlelady from Minnesota, Ms. Craig.
    Ms. Craig. Thank you, Mr. Chairman, and thank you, 
Secretary Perdue, for appearing before the Committee this 
morning.
    As we have heard from a few of my colleagues, and 
especially in districts like mine where we have just a ton of 
family farmers, it is no secret that the trade policies of the 
last few years have put Minnesota farmers in a little bit of 
turmoil here.
    The Market Facilitation Program certainly kept farmers 
afloat, but I am concerned that we have set a terrible 
precedent for U.S. farm policy. This Committee has spent 
decades working toward a farm safety net that is predictable 
and reliable. At the agency's Ag Outlook Forum, you said 
regarding another round of MFP, I would not anticipate it. 
Farmers have to farm for the market and what it is telling 
them, and what their capabilities are from a production 
perspective. The next day, the President tweeted that 
additional MFP payments are possible until the new trade deals 
kick in.
    I spent 25 years working in business before I came here 
last year, and this kind of policymaking, it is not 
predictable. It is not reliable. It is no way to make farmers 
run their businesses; and, given that farm debt is increasing 
twice as fast as farm equity, how can their lenders ignore such 
a statement from the President? Should I take your comments 
here and this morning to mean that you are advising the 
President against the release of another round of MFP, which by 
the way, I strongly supported the previous rounds? And can you 
comment on why the President tweeted about the possibility of 
more ad hoc MFP payments in the same month that he proposed a 
budget that would gut Federal crop insurance, which is, of 
course, one of the most predictable and market-based risk 
management options available to farmers?
    Secretary Perdue. Certainly. I would stand by my statement 
that if the President asked me today, and we communicate on a 
regular basis, is that I would not recommend another Market 
Facilitation Program payment. His tweet, as I understand it and 
I read it, was preceded by the preposition if, which means a 
contingency there. If this trade we expect does not 
materialize, he is prepared again to help people, farmers, move 
through this. We already heard today that it has been critical 
for their bottom lines to be able to continue. Lenders, have to 
look at the market, look at the production plans of their 
producers coming in. It is tough out there, but it is going to 
be challenging. Again, I have expressed optimism that the trade 
will develop, but if it does not, I believe that the President 
will do what he said he will do.
    Ms. Craig. Well, I would just like to respond to that, and 
then I will move on to my next question. Good farm policy 
should be focused on good economics, not political expediency. 
And this is exactly the problem, Mr. Secretary, is what about 
that is a predictable farm safety net and how are small and 
beginning farmers supposed to plan with comments like that?
    With that, I will leave it to you to figure out how we 
decrease his use of Twitter.
    I would like to now shift to beginning farmers. For more 
than a decade, the Main Street Project outside of Northfield, 
Minnesota, where I represent, has trained rural Latino 
immigrants on regenerative ag practices in poultry as a means 
out of poverty. This is Janet. She is just one of the beginning 
farmers who has taken part in training through the Main Street 
Project. In August, the project was informed that they had been 
awarded a U.S. NIFA Beginning Farmer and Rancher Grant. Those 
grant funds were publicly announced in October, but as of 
today, the organization still does not have the funds they were 
promised by USDA. You said the move of ERS, NIFA to Kansas City 
was to better serve farmers and ranchers where they are, but 
that just hasn't proven to be the case for farmers like Janet.
    [The information referred to is located on p. 83.]
    Ms. Craig. Following relocation, the Office of Grants and 
Financial Management only has 26 positions filled out of the 95 
total permanent positions. What impact has this had on the 
agency's ability to get money out the door?
    Secretary Perdue. I can tell you what I have been told by 
NIFA is that the money is getting out of the door. I would love 
to hear about the specific one. I will absolutely respond back 
about where that grant is. But I am being told that 
deliverables are on schedule in that way. We continue to hire 
there while we extended some people here in order to deliver 
the services we were committed to, that services would not 
suffer, and that this is a broad-based issue. I will be back, 
but we will specifically talk about this one.
    Ms. Craig. Thank you. We have been in touch with USDA, but 
it shouldn't take a Member of Congress to get those dollars to 
the folks they have been awarded to.
    Secretary Perdue. Absolutely not. I agree.
    Ms. Craig. Thank you again, Mr. Secretary, and I yield 
back.
    The Chairman. I thank the gentlelady.
    The gentleman from North Carolina, Mr. Rouzer.
    Mr. Rouzer. Thank you, Mr. Chairman.
    I noted the conversation a little earlier about big 
operators versus small operators, and so forth, and it is 
important for the record to point out the bigger you are, the 
bigger your note at the bank. A lot of people forget that. It 
is not like your margins get so much greater the bigger you 
get. The margins are small, so you have to get big in order to 
make it all work.
    Mr. Secretary, thank you for being here. You are doing a 
great job, and I really appreciate all the work that you and 
your team are putting in.
    I have a constituent back home that has a unique situation. 
He is not eligible for WHIP, not eligible for NAP. We had 
Hurricane Florence come through in 2018, totally wiped him out, 
about a $1 million loss for him. He produces native warm season 
grass seed and wildflower seed, and a lot of those. A lot of 
that is used in our conservation, CRP, et cetera. And I know 
you and Commissioner Troxler have been in consultation about 
the block grant to the states and trying to work out some 
agreement there. This is a very unique situation. I am sure 
this gentleman is not the only one who finds himself ineligible 
for NAP and not eligible for WHIP. I would like for you guys 
to, in your Department, to take a good look at his situation, 
if you don't mind, and if it is possible to get something 
worked out with Commissioner Troxler on that front.
    I know the Commissioner's team are very much aware of this 
individual and his particular situation, and it is important to 
me that we exhaust all angles to see if we can help him out.
    Secretary Perdue. Sure. We would rather be in negotiation 
rather than a confrontation.
    Mr. Rouzer. Absolutely, absolutely. I know you all are 
going back and forth, so I would categorize it as a 
negotiation. Like I said, I know the Commissioner's folks are 
well aware of this particular situation as well.
    Second point, the vaccine bank for FMD, there are a number 
of us on this Committee that have an interest in that and the 
implementation of that. I am just curious where that stands?
    Secretary Perdue. Yes, Under Secretary Ibach, he issued a 
request for information over people interested in proposals and 
doing that. That was the third leg of the stool, along with the 
overall early detection through, we have already put money out 
into the labs across the country, and then an early detection 
and biosecurity network of awareness and training. The foot-
and-mouth vaccine is where we are getting information and how 
that can be done. There are some limitations here on the 
mainland of handling that virus, so we have to take those in 
consideration and if our NBAF facility were up in Kansas, we 
could do it there, but we have to be extremely careful in how 
that is handled. We are in the midst of taking requests for 
information now about proposals of what they think they could 
do in that regard.
    Mr. Rouzer. Moving on to trade. We have a great opportunity 
with the UK to put together a really, really good trade deal 
that I think if we can do, it will substantially help us in 
negotiation with the EU later on. Do you have any comments on 
where we are with the UK and the possibility there, and what 
that would mean for American agriculture?
    Secretary Perdue. I think the relationship, both heritage 
and otherwise, I believe it will be a good opportunity for the 
United States to do a trade deal with the UK. We know that they 
are constrained until the end of the year, but we are 
preparing. I will be visiting there in a couple of weeks and 
making our case over our products from a reciprocal basis in 
that way, and we are hopeful that we can get something done 
with the UK, which we think will lead to better relationships 
with the EU. But we see an anxiousness of a willingness for the 
UK to trade in an area and a method that is not constrained by 
some of the EU rules.
    Mr. Rouzer. Yes, it is going to be a great opportunity for 
us, and I think to the degree we are successful with that, it 
will really help us with the EU. That is my read on it, and let 
us know how we can be helpful in that process.
    Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman.
    The gentlelady from North Carolina, Ms. Adams.
    Ms. Adams. Thank you very much, Chairman Peterson, Ranking 
Member for hosting the hearing. Mr. Secretary, it is good to 
see you again.
    Secretary Perdue. Yes, ma'am.
    Ms. Adams. I would like to ask a couple of questions about 
the impacts of the ERS and NIFA relocation, and the impact that 
it is having on 1890 land-grant universities. All 19 schools 
turned in their applications last November for the 1890 
scholarships, which received $40 million in mandatory funding 
in the 2018 Farm Bill, but it has been 3 months. They still 
haven't received the funding. They are concerned that the money 
which is somewhere in the neighborhood of $750,000 per school 
may not be available until late this spring for students 
entering school in the fall.
    Having been a professor for 40 years, I know that schools 
need to be able to notify students earlier than late spring 
about their scholarships so that their recruiting can make an 
informed decision.
    Given that about 68 percent of NIFA's positions are vacant, 
what is USDA doing to ensure this delayed funding doesn't 
prevent students from studying agriculture at one of our 1890s?
    Secretary Perdue. First of all, Ms. Adams, I am very 
disappointed to hear that report because it conflicts with what 
my people at NIFA have told me regarding that, particularly 
with the HBCUs regarding the student scholarships there. As I 
indicated in my earlier comments, it is my understanding that 
these are being disseminated, and I will specifically find out. 
If your facts are accurate, then I am extremely disappointed in 
the information I am being given about that. Our commitment in 
this move was that the services would not be inhibited, and 
that is my expectation in that way. We allowed some extensions 
in order to make sure that services were continued.
    Ms. Adams. Okay, great. Well, I hope you do look into that. 
That is the information that I have. You do have a timeline 
already for dispersing the funding?
    Secretary Perdue. Yes, ma'am. We actually prioritize those 
HBCU scholarships, because they were new and we know that the 
students were looking forward to them. As I said, I will check 
on that and if your facts are accurate, then I am very 
disappointed in the information I have been given.
    Ms. Adams. Okay. If you would get back to me, I would 
appreciate it.
    [The information referred to is located on p. 89.]
    Ms. Adams. Let me also ask about an update on how the 
implementation is going on the Centers of Excellence, which I 
did fight for along with some of my colleagues in the 2018 Farm 
Bill. I have heard that the Department is moving slowly on 
getting the money out for Fiscal Year 2019, an appropriation of 
about $5 million of the centers. Another $6 million was 
appropriated for these centers, and we really need to get this 
money out. I am concerned, again, about the lack of staff for 
the 1890s program and NIFA due to the move to Kansas, and which 
has contributed to this delay, we think. How is USDA working to 
fill the gaps, first of all, during the transition to ensure 
that the work to support the 1890s is taking place?
    Secretary Perdue. It is my understanding that these 
consortiums of these Centers of Excellence are being processed 
in that way over their applications of what they want to do. In 
fact, I don't know how many I have visited, but I don't hear 
these things when I am on campus there from the Presidents, and 
I have been to several HBCUs and we try to be very open about 
any kind of issues they are facing, and I don't hear those. If 
they are contacting you, there must be an issue, but I wish 
they would contact me as well.
    Ms. Adams. Okay. Well, I strongly supported the inclusion 
of the Office of Urban Agriculture and Innovative Production in 
the farm bill, pushed for the funding. One of the provisions in 
the bill provided $10 million in mandatory money through the 
Commodity Credit Corporation. I would expect that with funding 
already available for use, that those grants would be 
implemented expeditiously, so I am glad that you are going to 
look into it.
    Do you have any updates on the implementation of the 
competitive grants, and of the office itself?
    Secretary Perdue. Yes, ma'am. I can't give you the 
definitive definition. I remember our staff mentioning that to 
me about where we were on it, but I would rather, since I can't 
be sure about it, I would rather tell you in a response in a 
QFR over where we are on those competitive grants.
    [The information referred to is located on p. 90.]
    Ms. Adams. Okay. Just one comment. I just have a few 
seconds; but, we are still concerned about the SNAP funding. It 
is really having an impact in my district. It certainly will be 
in terms of some of the rules, and I mentioned those to you 
last time we had breakfast.
    Secretary Perdue. Yes, ma'am.
    Ms. Adams. If you could give me a little update on it or 
send the information to me, I would appreciate it.
    Secretary Perdue. Yes, ma'am. If I can respond to some of 
the SNAP concerns here. We are issuing waivers as we speak 
here, in 18 states, again, on the waivers that do qualify based 
under the new rules, 186 labor market areas and 18 states. We 
would have to look if yours are eligible in there and qualify 
for that, but people are applying for waivers and we are 
continuing to do that under the new rules that we have put out.
    Ms. Adams. Thank you, sir. I am out of time. Mr. Chairman, 
I yield back.
    The Chairman. I thank the gentlelady.
    The gentleman from Louisiana, Mr. Abraham.
    Mr. Abraham. Thank you, Mr. Chairman.
    Mr. Secretary, I know we don't have a language barrier 
between the great people of Georgia and the great people of 
Louisiana, and I might argue the rest of the state, but my 
good, good friend, Rick Allen, called them pecons. We call them 
pecans in Louisiana, so just to get that straight on the 
record.
    Mr. Secretary, thank you for being here. As you know, you 
are a rock star in the agriculture community. We appreciate all 
you have done. If I could add to your comments about farming, 
if we take out our soldiers, our men and women in uniform that 
defend our country most admirably, that farming probably is the 
toughest and most volatile profession that we have in this 
country. It is one bad weather storm, and they are in a very 
precarious position.
    Your verbal statement alluded to the high-speed broadband. 
We all know here how critical that is for just everything, just 
life now in America and in the global world, the global 
economy, and thank you for your work. Thanks to your work, we 
got $15 million in Louisiana for deployment of high-speed 
broadband.
    My question is, moving forward, what can we as Congress do 
to help with more deployment of high-speed broadband, and how 
can we get more companies to buy in to the Federal program? 
They are already set up to deploy. They have the technology. We 
just need them to get in the game. So, what can we do?
    Secretary Perdue. One of the things you all already did was 
to loosen up some of the definition of unserved, under-served 
whereby recently, we know there is a real issue with the maps 
where you see that. Helping us with more definition, I know the 
FCC is working on that, but if one house in a Census track had 
service it was declared as served and the most of it was not. 
So, that has been cured.
    Again, I would ask you and your colleagues to look at how 
we are deploying this money that you have given us, this first 
$600 million, the other $1.1 billion, and if you like that 
methodology of what we are doing, let's continue in broadening 
that out from Rural Development. It has been well-received, and 
we would love to continue to do more of it. It is needed, as 
you know. The problem is it is a long way from being 
everywhere.
    Mr. Abraham. And about the companies, these big, global, 
national companies that have the technology in place, they have 
already got high-speed broadband. They have that infrastructure 
in place. How can we get them more involved in some of these 
projects?
    Secretary Perdue. As you know, the concern about 
duplication or overbuilt, that is probably going to take some 
Congressional action with the major carriers there. We have a 
lot of dark fiber out there that we don't know where it is and 
not being utilized, and they used Federal money before to put 
that dark fiber in there but it hadn't been turned on. Some 
investigation through appropriate agencies and with 
Congressional impetus there could help that coordination.
    Mr. Abraham. Thank you, and just a quick add-on. My farmers 
certainly in my district and all over Louisiana that I have 
talked to, and there have been many, they are very optimistic 
with the trade, the deals that are going on with China, so 
there are good times ahead.
    Mr. Chairman, I yield back. Thank you.
    The Chairman. I thank the gentleman.
    The gentlelady from Washington, Ms. Schrier.
    Ms. Schrier. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary for being here.
    I, first of all, wanted to echo Mr. Allen's comments about 
the struggles of H-2A visas and what an economic challenge that 
poses to our farmers in the Northwest. I also wanted to make 
you aware, if you are not already aware, that there is an 
excellent bipartisan bill with several Members of this 
Committee called H.R. 5038, the Farm Workforce Modernization 
Act that does several really good things for our farmers that 
people on both sides of the aisle agree on. It streamlines the 
H-2A visa process; it puts controls on the inflation of wages; 
and it also has a path to citizenship for people who are 
working in ag and commit to continuing to work in ag. And so, 
if you could whisper in the President's ear about that bill, I 
would love to see, and a lot of people in this room would love 
to see that move forward.
    Secretary Perdue. We are very aware.
    Ms. Schrier. That didn't sound reassuring.
    My second comment was about something called Little Cherry 
Disease. In Washington State, apples and cherries are among the 
state's top 15 exports, so protecting and strengthening the 
tree fruit industry is critical for our economy. This past 
cherry season, it became apparent that the Pacific Northwest 
cherry growers are facing a substantial threat from Little 
Cherry Disease. It is caused by viruses that are either 
transmitted by insects or that are transmitted through root 
systems, and so, the only treatment for this, once it is 
detected, is to pull the trees out. And that is a significant 
economic threat. This has reached epidemic proportions in 
Washington State, and growers are scrambling to obtain new 
tools to detect and treat this and stop the spread.
    I am aware of a tree fruit entomologist position at the 
Wapato ARS laboratory that remains vacant after the retirement 
of the scientist in July of 2019, and it is my understanding 
that ARS has not been able to fill this position due to 
insufficient funding. In addition to this, I am aware of at 
least two other positions at the same laboratory that remain 
vacant, and I know you talked when Mr. Cox asked about staffing 
and whether we had sufficient staffing, and clearly in this 
part of my district and in my state, we do not have sufficient 
staffing for the excellent work between Washington State 
University and ARS.
    This is not a question. It is really more to just bring to 
your attention how important it is that the ARS labs, 
specifically the one in Wapato, be fully staffed in order to 
manage this sector and protect our economy.
    The second issue that I wanted to talk about, if I do have 
a moment, is herbicide resistance. This is becoming an 
increasing problem across the country, and because herbicides 
are not working, tillage will now probably increase as the most 
economical alternative control measure. The problem is that 
this goes against all the modern science of soil health. It 
increases wind and water erosion. It also releases more carbon 
dioxide into the atmosphere and compromises soil health, and 
will probably also compromise water quality in the Snake River 
and Columbia River.
    Washington farmers all want to do the right thing. They 
want to conserve soil. They want to have healthy soil. They 
want to pass this on to the next generation, and they need 
help. And I wondered how is the USDA addressing regionally-
specific problems associated with herbicide resistance and soil 
conservation, and what do you need from us to help that happen?
    Secretary Perdue. We need, obviously, less tillage--rather, 
more tillage, as you said. The USDA certainly works closely 
with our registration partner EPA in making sure these new 
developments about technology are available as plants and weeds 
become resistant to other types of things. It is mostly an 
interagency regulatory issue.
    Moving forward, we are working with the Department of the 
Interior Fish and Wildlife as to issue a Biological Opinion. 
National Marine Fisheries has to issue a Biological Opinion on 
new products. We are encouraging them to use the same set of 
facts and data over this in order to move these along more 
expeditiously. As things become resistant, we don't want the 
answer to be more tillage and more plowing. We want it to be 
more no-till and using these safe products through--to control 
the problem.
    Ms. Schrier. Thank you for your comments. I am running out 
of time, but this calls into question, just like there is an 
understaffing at the USDA, the issue of losing scientists at 
the EPA who could really help us solve these problems as well.
    Thank you. I yield back.
    The Chairman. I thank the gentlelady.
    The gentleman from Kentucky, Mr. Comer.
    Mr. Comer. Thank you, Mr. Chairman, and Mr. Secretary, it 
is great to have you back to the Agriculture Committee. I am 
big fan, and you are doing a great job, and you are very 
popular with everyone in the agriculture community. I want to 
thank you also for your commitment to broadband. That is one of 
the biggest issues in my rural district in Kentucky is lack of 
access to broadband. I know that we had three communities in my 
Congressional district that were rewarded with the first round 
of ReConnect money, and I was wondering if you could kind of 
give us an update on how round 2 is going to take place, and 
what can we do to get more participation in that program?
    Secretary Perdue. Well, the three areas of the $600 million 
you gave us initially, we had $200 in grants, $200 in loan 
grants, and $200 in loans. They all three were oversubscribed. 
We began our second round of applications this January. It 
closes on the 16th of March, and we expect oversubscription in 
those as well, based on the popularity there. As long as that 
continues to take place, we will probably perpetuate the 
program the way it goes on, and as I indicated earlier, I hope 
you all will give us feedback about whether there could be 
improvements or better, and Congressman Abraham did to some 
degree. We look forward to hearing from you.
    Mr. Comer. Well, I appreciate that, and I am sure you will 
get more applications from Kentucky and you will be hearing 
from our office. But again, thank you for that first round.
    Next, I wanted to talk about hemp. We have had 
conversations with hemp and I have had numerous conversations 
with your great Under Secretaries that I have worked with in 
the past on this issue. I want to thank you, first of all, for 
the recent USDA announcement to delay the enforcement of the 
requirements for labs to be registered by the DEA. That was 
something I put in my letter request to you, and I appreciate 
you doing that. That was a big issue in Kentucky.
    But, I have always been a huge proponent of hemp and I will 
continue to be. I believe in hemp. I believe there is a 
tremendous future for hemp. When I was advocating for hemp when 
I was Commissioner of Agriculture, I was thinking about fiber.
    Secretary Perdue. Right.
    Mr. Comer. And what has happened, especially in Kentucky 
and many other states, is the CBD oil market has kind of taken 
over. And I am a farmer, I can say this. In agriculture, we are 
very good at overproducing things sometimes. Hemp was grossly 
overproduced in Kentucky and many other states this year. I 
know that language was put in the farm bill for hemp crop 
insurance. I am not a fan of that. I fear that that will lead 
to more overproduction and potential fraud, and I just wanted 
to publicly say I had some concerns about that, and hopefully 
that the final end-product will be one that will not encourage 
overproduction. I know one of the requirements for crop 
insurance that I had mentioned in a previous Committee hearing 
to Bill Northey was I hoped that it said you had to have a 
contractor with a processor before you could get crop insurance 
to prevent fraud. And that is in the language, the way I 
understand it. But hopefully there is some awareness of the 
fact that there are credible hemp companies in America, and 
there are some that aren't credible. We have had several in 
Kentucky file bankruptcy that have left the farmers hanging 
with a surplus crop of hemp.
    These are concerns that I have moving forward. I have 
shared that with many people in USDA. I appreciate the good 
work that you are doing. I know this is a very challenging 
thing for the USDA to have to administer, but I appreciate the 
work that you have done thus far, and I look forward to working 
with you on that issue in the future.
    Now, with respect to trade, I was just wondering if you 
could kind of give me a brief update of how things are going? I 
know that we had the Phase 1 agreement with China. Are they 
fulfilling their agreement thus far in purchasing the 
commodities that they pledged to procure?
    Secretary Perdue. The coronavirus has clouded this 
somewhat. Obviously, this is from a physical perspective of 
things backing up at the port. The countercyclical part of 
their buying typically when South America is harvesting, that 
is when they go there. So, those are some of the 
considerations.
    The bright spot that I mentioned a couple times before this 
morning is that we see the technical things that need to happen 
in order to facilitate the kind of trade is happening. The 
technicians there, and that is where a lot of those little non-
trade tariff barriers that China has used to push back are 
being torn down. I take a lot of optimism from that that they 
are trying to fulfill their obligation they agreed to on those 
numbers.
    Mr. Comer. Well, my time has run out, Mr. Secretary. On 
behalf of Kentucky farmers, I want to thank you for your 
commitment to helping make sure that farmers are a priority in 
this trade agreement with China. Our agriculture community in 
Kentucky appreciates you and appreciates the President. Thank 
you.
    Secretary Perdue. Hemp is tricky. We need your help.
    The Chairman. I thank the gentleman.
    The gentleman from California, Mr. Carbajal.
    Mr. Carbajal. Thank you very much, Mr. Chairman, and 
welcome, Secretary Perdue. I have always appreciated your 
candor and your straightforwardness of dealing with the issues 
at hand.
    I want to start out by just expressing my great 
disappointment with this Administration with the proposed $182 
billion cut from the SNAP Program over the next decade, and the 
implications that that has for so many food-insecure families, 
vulnerable families throughout our country and in my district.
    In my district alone, I have 111,000 individuals that rely 
on these important programs, and quite frankly, it is not only 
callous, but it is extremely misguided. I would be remiss if I 
didn't share with you my outrage with the direction this 
Administration is going in regards to the SNAP Program, 
violating the spirit of compromise that we reached in the 2018 
Farm Bill, which dealt with a lot of these issues already. But 
here we are again. The President didn't get his way, and he is 
just continuing to just go after the most vulnerable. Please 
know that I am extremely disappointed, as many people are.
    But with that, let me move on to other issues. Earlier, one 
of my colleagues mentioned H.R. 5038, the Farm Workforce 
Modernization Act, which is a bipartisan product that lends 
itself to a lot of potential. I know you mentioned you were 
aware of it, but I am just wondering, what is the 
Administration, what are we doing to move that forward if it is 
such a reasonably decent piece of legislation, and bipartisan?
    Secretary Perdue. Can you mention the program again? Which 
program?
    Mr. Carbajal. Oh, no, that was the legislation is the 
second one I am speaking about. The first one was SNAP.
    Secretary Perdue. Yes.
    Mr. Carbajal. But the bill that passed the House in a 
bipartisan fashion, the Farm Workforce Modernization Act.
    Secretary Perdue. Certainly. Labor is a big issue and we 
have been visiting with the other House here and the Senate to 
talk about the provisions there that could be included in that, 
as the way any legislation passes in that regard. It is very 
needed. We need a legal, reliable workforce, as I indicated 
earlier. We need in this country to differentiate between 
immigration, which is one thing, and a legal, reliable, 
temporary workforce in agriculture.
    Mr. Carbajal. Absolutely, and that is what that legislation 
would do. I would hope that the Administration is working with 
our friends in the Senate and trying to get them to really try 
to find that compromise so we can move forward with this 
legislation.
    Second, specialty crops grown on the Central Coast, which 
is in California in my district, are important to our local 
economy. These high value crops such as wine grapes and citrus 
are vulnerable to pests and diseases, and USDA and the State of 
California have historically been strong partners in protecting 
these crops. That is why, again, I was disappointed to see the 
proposed cuts to the critical APHIS Program in the Fiscal Year 
2021 President's budget request, including an $8.9 million in 
reduction in spending to combat specialty crop pests.
    Just last month, APHIS and CDFA expanded the quarantine 
zone for citrus greening in my state. We have seen the impact 
this disease can have on states like Florida, yet the President 
did not ask for additional resources to fight this disease in 
his budget. Additionally, the President's budget requests 
propose reducing spending on pests, such as the glassy wing 
sharpshooter, European grapevine moth, and the light brown 
apple moth, all of which threaten Santa Barbara County and San 
Luis Obispo County agriculture production, which are the 
largest economic drivers in my district.
    How would these proposed reductions in spending impact 
USDA's ability to protect California's crop farmers from 
devastating pests and diseases?
    Secretary Perdue. Well, USDA and APHIS particularly 
understand the potential for pest destruction of industries. 
You mentioned the citrus industry and others, and I can assure 
you that they are using any money that is appropriated to them 
in order to protect the crops in your area, because across the 
country we have other issues in Pennsylvania with the lantern 
fly and all those issues that are continued pests coming in, 
and we will do the very best we can.
    Mr. Carbajal. Thank you, and looping back to my initial 
question on SNAP, is California listed on the waiver list that 
you mentioned earlier?
    Secretary Perdue. Let me see, there are several waivers in 
California. Yes, sir, there are 17 labor market areas waived in 
California.
    Mr. Carbajal. Are any of those San Luis Obispo and Santa 
Barbara County?
    Secretary Perdue. I think so.
    Mr. Carbajal. Is that a think so or a yes?
    Secretary Perdue. I can't say for sure. I believe that you 
are listed on part of the area. I don't know what those 17 
areas are specifically, but we have 17 labor market areas in 
California that waivers are issued.
    Mr. Carbajal. Great. If we could loop back later on, can I 
get that? That would be great.
    Secretary Perdue. We will get that for you.
    [The information referred to is located on p. 91.]
    Mr. Carbajal. Thank you, Secretary Perdue.
    Mr. Chair, I yield back.
    The Chairman. I thank the gentleman.
    The gentleman from Kansas, Mr. Marshall.
    Mr. Marshall. Thank you, Mr. Chairman, and let me also add 
my welcome, Mr. Secretary, for being here.
    I can start by spending my 5 minutes saying thanks for so 
many things for my producers back home. Maybe just start off 
with the speed and efficiency your Department carried out the 
MFP payments. You asked your workers to do more with less over 
the past several years, so thank you for your help there. A 
special thanks for your continued leadership to support the 
ethanol and biodiesel industry as well. This is important not 
only to agriculture, but also the rural communities. In so many 
of these communities, the same folks that are working in that 
ethanol, biofuels industry are the same folks that are leading 
the Rotary clubs, leading United Way fundraising, so that it 
means so much more than just the jobs there at those plants. 
So, thank you.
    In your comments, you mentioned the higher blends 
infrastructure, a city program that provides over $100 million 
in grants to better enable market adaptation for high blends of 
ethanol and biodiesel by investing in infrastructure, and we 
look forward to just what your vision looks like with that, and 
maybe you could briefly just share what your vision is, going 
forward, with some of those plans?
    Secretary Perdue. I think our effort would be to make E15 
kind of the law of the land regarding that. That is a 50 
percent increase in demand of a sound environmentally healthy 
and safe fuel that would be utilized, and that is why the 
infrastructure program is there, to help build out the 
consumers' opportunity to purchase this. We think with a better 
environmental footprint and less cost, then consumers will 
rapidly adopt that if they have access to it.
    Mr. Marshall. Sounds great. So, thanks for your efforts, 
and we look forward to working with you on that.
    Next, if I could talk a little bit about one of my favorite 
subjects, NBAF, the National Bio Agro Defense Facility located 
in beautiful Manhattan, Kansas, home of Kansas State 
University, and just thanks so much for your personal interest 
in touring that facility with me. As you know, that I am 
working with our senior Senator, the tight end coach also for 
the Kansas State Fighting Wildcats, Chairman Pat Roberts. And 
he and I are working on legislation that would codify the 
mission and transfer the facility to USDA. How would you 
envision future partnerships on research with other Federal 
agencies shaping up at the facility?
    Secretary Perdue. Congressman, I hope you feel as I do. I 
believe that transition is going very well from DHS. While that 
facility was initially put under Department of Homeland 
Security, it really fits more with our scientists and 
protections there that we are working at Plum Island to do many 
of these very dangerous types of things with dangerous 
diseases. We think the interagency process is going well, the 
relationship that was described and outlined to you and your 
Kansas colleagues over the transition of who does what. We 
think it is going very well. I hope you found that to be the 
case.
    Mr. Marshall. Absolutely, and I was just there recently in 
the past month meeting more and more of the professors, the 
researchers, people moving from Plum Island, finding how 
welcoming Manhattan, Kansas is. I agree it is going well.
    Given your response, I would also like to get your thoughts 
on codifying those relationships through legislation here in 
Congress.
    Secretary Perdue. Again, while we will implement that, I 
think I will just leave that up to the determination of 
Congress. If you think those relationships and responsibilities 
need to be codified, then I certainly would have no objection 
to that.
    Mr. Marshall. Okay, thank you, and I have time for one more 
question here.
    I would like to talk about beef for a second. I am getting 
a few phone calls and concerns back home. Under the Federal 
Meat Inspection Act and corresponding FSIS regulation, no meat 
product label may bear any false or misleading statement of 
origin or quality. However, it is my understanding that current 
FSIS policy allows imported beef products to be generically 
labeled as products of the USA, as long as these products 
undergo minimal processing or repackaging in the USDA FSIS 
inspected facilities.
    Mr. Secretary, do you agree that current policy has the 
potential to mislead consumers, and if so, how do you intend to 
address this issue in a way that does not violate current 
agreements with our North American trading partners?
    Secretary Perdue. I would agree with that, and certainly, 
you are aware of the overall COOL dispute that was negotiated 
and litigated at WTO. We have to be very careful. We are under 
consideration right now of how we can give transparency and 
information to the consumer that doesn't violate that, and we 
think there is a middle ground that we think is an appropriate 
label that looks like slaughtered and processed in the United 
States. I don't think meat that just comes in and maybe just 
cut up and packaged from somewhere else ought to be product of 
the U.S. I think that is another definition. We do feel like we 
would probably be treading on very difficult ground if we, as 
some people in the cattle industry want born, slaughtered, and 
processed. We think we would be, again, taken back to WTO 
court. And the problem is, they have that billion-dollar 
judgment hanging over us that has not been suspended, and if we 
did that, we would be vulnerable to that.
    Mr. Marshall. Mr. Chairman, could I have 30 more seconds?
    Mr. Secretary, at the end of the day, this issue is about 
truth in labeling, and I am pleased to hear that this is 
something USDA is working to address. However, I am concerned 
against any reforms that would ultimately preserve this or any 
other minimally informative origin labeling claim. There is a 
growing desire from consumers for more accurate information 
about the foods they purchase, and I can assure there is broad 
bipartisan support here on Capitol Hill for USDA to update 
these regulations in a meaningful way.
    Secretary Perdue. Thank you.
    Mr. Marshall. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman. I yield back.
    The Chairman. I thank the gentleman.
    The gentleman from Florida, Mr. Lawson.
    Mr. Lawson. Thank you, Mr. Secretary, one of the things I 
wanted to respond to: there was some question about the 
scholarship program for HBCUs, and my dean is here from Florida 
A&M University. Dr. Taylor, will you stand up there and let him 
see you? And we discussed this yesterday, they are very, very 
pleased with the way things are going, in order to provide a 
scholarship, and also stated that they are recruiting high 
quality students for this program, which is going to be a very, 
very successful university. The next time you are in 
Tallahassee, I am going to make sure you get some of the best 
peach cobbler that we have there.
    Secretary Perdue. Again.
    Mr. Lawson. Okay. One of the things I wanted to comment on 
is USDA hemp total testing, the requirement to test for three 
percent THC, making it difficult for new hemp crops to pass the 
test. States have to follow up with USDA rules. It is a big 
problem nationally, and I am sure that you all are aware of it. 
Are they going to try to fix some of this? Florida growers will 
be able to submit an application for the cultivation permit 
within 20 days. The Florida Department of Agriculture is 
expecting 3,000 applications. There could be a big business in 
Florida, but testing requirement is making it a little 
challenging.
    Secretary Perdue. Well, it is no doubt that, while there 
has been some relaxation recently, I am not sure if your 
comments reflect what we have done on the lab testing in the 
last few days. This interim final rule, we didn't get it nailed 
right in the bulls-eye, and we have tried to make some 
corrections there, and OMB has allowed us to do that. Frankly, 
the testing, and the limitations, had a lot of impact from DEA 
and interagency, and they were not excited about the crop as a 
whole anyway, and we had some pretty serious constraints, so we 
are trying to address the lab issue, which was a real 
limitation.
    Mr. Lawson. Okay. Thank you. In 2019, the Disaster 
Supplemental package, there was established a historic timber 
block grant program that was advocated here in a bipartisan 
manner by $380.9 million set aside for Florida. The U.S. 
currently is at a standstill with states, agencies about 
acreage payment to timber producers. Mr. Secretary, my first 
question is simply does USDA have an issue with state agencies 
using the full amount of block grants funds to advocate for 
them so that they can provide adequate acreage payment to the 
timber producers?
    Secretary Perdue. This was, again, the balance, Mr. Lawson, 
in where we are trying to limit the larger landowners. We did 
that in citrus, as you know. It worked very well there. I think 
we are really close to a negotiation agreement with Florida 
over that. They wanted, initially 10,000 acres, then 5,000 
acres, which would be very large payments that we didn't feel 
like would represent the will of Congress in that disaster 
block grant.
    Mr. Lawson. Right. And last, what benefit does returning 
useful block grant funds serve for struggling farmers because 
of the acreage cap, as you talked about? Where would the rest 
of the money go if they return that money?
    Secretary Perdue. Comes back to the Treasury.
    Mr. Lawson. Okay. All right. I look forward to working with 
Department and the state officials to make sure that the 
farmers are receiving their critical disaster assistant funds 
stemming from Michael.
    Secretary Perdue. If I may, in this time allowed, give the 
difficulty there. These are estimates. These damages are 
estimates there. They are not registrated, they are estimates 
there, and the challenge is we estimate, and give that amount 
that is estimated. And if it doesn't live up to that, based on 
other things, there has been the desire to think of the money 
being granted to be able to do whatever they want to with. Our 
position, USDA, is to meet the need of the disaster, but then 
if the estimate doesn't reach what was estimated, the need 
doesn't reach what was estimated, then the money should be 
returned. That is where the real challenge comes in.
    Mr. Lawson. Okay, thank you. At the conclusion of my time, 
about to run out, I am sure my dean would like to say hello to 
you, and let him know how things are going.
    Secretary Perdue. I will do that, I want to hear how his 
students are doing.
    Mr. Lawson. All right. That is great. Thank you. I yield 
back, Mr. Chairman.
    The Chairman. I thank the gentleman from Florida. I now 
yield 5 minutes to my good friend, Mr. Dunn from Florida.
    Mr. Dunn. Thank you very much, Mr. Chairman. Secretary 
Perdue, I want to thank you for providing the agriculture 
community with the certainty of your updated regulatory 
approach to the gene edited crops. Under your leadership, USDA 
was the very first to implement President Trump's Executive 
Order on a regulatory framework for agricultural biotech 
products. You have set the bar for the way we ought to regulate 
these innovative tools, and I hope that the FDA and EPA will 
follow your lead. Given what is at stake, can you comment on 
the regulatory burdens that still hurt farmers, foresters, and 
ranchers, and where can we help you, especially as it regards 
biotech?
    Secretary Perdue. The good news is, and what I have seen 
is, Secretary Bernhardt at Interior has Fish and Wildlife 
basing their Biological Opinions on sound science. We still 
have some challenges at NMFS that we would love to see the same 
set of data being adopted there, where we would make a similar 
type of assessment, rather than using different facts in that 
way, and EPA has been very helpful in that way. So those 
interagency agreements are working well, if we can continue 
that. The animal gene editing is an issue we still have to 
resolve.
    Mr. Dunn. The FDA, you mentioned earlier you are still 
having negotiations with them about what constitutes----
    Secretary Perdue. We are still in the process of 
determining how. We have no reason to want to regulate gene 
editing in all animals, but we think the food animals, where 
the USDA has control over the protein source of America, makes 
sense.
    Mr. Dunn. I agree with you entirely, thank you, Mr. 
Secretary. I know you hear a lot about Hurricane Michael, you 
can hear one more thing? Our FSA office has struggled to meet 
the demand after the hurricane, and I wonder what we can do to 
improve the staffing shortages caused by disaster-related 
claims. And you and I actually had a discussion a while back 
about a rapid response disaster team. Have you gotten any 
closer to that?
    Secretary Perdue. Once again, I answered a question earlier 
about the frustrating nature, in a 3\1/2\ percent unemployment 
rate, of onboarding people into a Federal job. I never would 
have thought we would have that kind of difficulty. Some of the 
permissions we have been given over local hiring authority, or 
really direct hiring authority, is helpful because we haven't 
found people who want to relocate. They can apply from other 
states, and not want to relocate when you offer them a job.
    Mr. Dunn. Well, hopefully we can get them a team that comes 
in for a few months and shores up the----
    Secretary Perdue. Yes, on the jump teams that way, 
certainly, from hurricanes and disasters.
    Mr. Dunn. Yes.
    Secretary Perdue. We try to deploy those kind of teams on a 
temporary basis.
    Mr. Dunn. Yes, that would be outstanding, and it would 
really help us a lot. USDA is still in discussion with the 
State of Florida about the block grant program. My good friend 
Representative Lawson mentioned that as well, and you did a 
pretty good job answering that, where that is, so keep the 
pressure up on them. We really want to help out, nobody has 
ever seen this much timber on the ground, and it is a threat to 
us now in terms of fires and disease.
    Secretary Perdue. We are doing that, and we are just trying 
to be reasonable, as far as the balance of the acreage cap, and 
how we did that. We had a very successful time in citrus. I 
thought that worked well. Florida did a good job, and we are 
going to get there soon. I think talks are developing very 
well.
    Mr. Dunn. I want to take the opportunity to thank you, and 
thank your staff, by the way, who has been very helpful, very 
easy to work with. I want to put it on the record that your 
help in making these programs occur, make them a reality. It is 
just been critical to the recovery in my district, and I am 
sure also Representative Lawson's. We want to continue to work 
with you on these projects, and we want to get a long-term fix 
for those, and we can't say thank you enough for all your 
efforts on our behalf. Mr. Secretary, thank you. I yield back.
    Mr. Panetta [presiding.] Thank you, Mr. Dunn. I now yield 
myself 5 minutes, not because I am in the chair, but because it 
is actually the order, Mr. Secretary, thank you for being here, 
as always. You never cease to amaze me how you continue to 
continually provide thorough answers to anything that you are 
asked, so I always appreciate that. And thank you for your 
visit to the Central Coast as well, coming out to my district 
and holding a town hall in my very blue district, so I 
appreciate that, your willingness to stand up there and give 
straightforward answers, and so I hope you do that today too 
with my question.
    I am going to start off also with something that I don't 
normally do, and that is quoting our President, President 
Trump. Last year, at the Farm Bureau, he was talking about the 
current labor crisis, and he said, ``You need people to help 
you with farms, and I am not going to rule that out. I am going 
to make that easier for them to come in and to work the farms. 
You have had some people for 20, 25 years, they are incredible. 
Then they go home, and they can't get back in. That is not 
going to happen.'' This is what he said, and he got one of the 
biggest ovations at that Farm Bureau meeting, just because of 
that quote.
    Now, obviously, you know where I am at on the legislation 
that we put forward and passed out of the House on a bipartisan 
basis, H.R. 5038, the Farm Workforce Modernization Act, a bill 
that protects our existing farm workforce, and promotes an 
existing agricultural workforce. And earlier today you 
mentioned the AEWR, the Adverse Effect Wage Rate. Now, this 
bill, as you know, basically freezes that. Now, you were 
saying, I think you know that it would go up six percent in 
2020. I have another list here, in Georgia it is going to go up 
5.2 percent. In Illinois it is going to up 9.5 percent. 
Kentucky it is 6.6 percent. Minnesota, 6.4, Ohio, 9.5 percent 
the AEWR's going up. This bill would freeze it for the first 
year, and then in years 2 through 9 it would put a cap on it at 
3.25 percent, and also put a floor at 1.5 percent. Mr. 
Secretary, don't you think that having a cap on the AEWR will 
benefit people who deal with the H-2A process?
    Secretary Perdue. A cap would help, but we need to look at 
the adverse wage rate in a different kind of way. What people 
are telling me, even with availability now, by the all-in cost 
of transportation and other things, which don't have to happen 
in H-2B, the affordability issue is outside. We are seeing 
producers cut back on production all across the country. We 
have examples in South Carolina, we have examples in Colorado, 
and sweet corn, and others, or in California as well.
    Mr. Panetta Mr. Secretary, how would you feel about getting 
rid of the AEWR?
    Secretary Perdue. We could do a more flexible AEWR that 
looked toward the economy, generally, in that way. The original 
intent, as I understand, was not to exploit the foreign 
workers. We don't want to do that.
    Mr. Panetta. Correct.
    Secretary Perdue. That is not happening now. And also, we 
don't want to displace domestic workers. That is not happening, 
because we don't have them out there.
    Mr. Panetta. Understood.
    Secretary Perdue. We need to re-look at that in that way, 
and I would be very supportive.
    Mr. Panetta. And you know that basically, in year 10, under 
the proposed legislation, legislation that passed the House, we 
would have a study, and the potential to get rid of it, or re-
look at the AEWR? You understand that?
    Secretary Perdue. That would be a good thing.
    Mr. Panetta. Understood. Now, also, you talked about 
conflating the people who are here, as well as the H-2A 
process. Well, as President Trump said, there are people in my 
community, especially on the Central Coast of California, the 
salad bowl of the world, that have been here for 20 to 25 
years, that have contributed so much. Not just to our economy, 
not just to our agriculture, but to our community. I mean, they 
really are the culture of who we are on the Central Coast. And 
so I do believe that there needs to be a way to make sure that 
there is some way to protect those people. Doesn't mean you 
give them citizenship, but there has a way for them to earn it, 
and I believe that this bill provides that. Are you familiar 
with this way for those types of people, who have contributed 
so much to our agriculture, to earn the opportunity to stay 
here?
    Secretary Perdue. I am familiar with those provisions, yes.
    Mr. Panetta. Okay. And you said something recently, that 
members of the White House leadership team would oppose the 
Farm Workforce Modernization Act. Is that correct?
    Secretary Perdue. I think yes.
    Mr. Panetta. And who would be those people?
    Secretary Perdue. I think the Administration, the White 
House in general.
    Mr. Panetta. Anybody in specific? I know you have had Ms. 
Boswell, who I appreciated, who's sitting behind you. She's 
done a very good job communicating with our office. I know she 
was sent to the White House. Would she have an idea of who 
would these people--who these people would be?
    Secretary Perdue. I think maybe it would be better for you 
to ask them. I am sure they would be willing to submit the--to 
your questions.
    Mr. Panetta. As always, Mr. Secretary, I look forward to 
working with anybody, anybody, who will help our ag labor 
situation.
    Secretary Perdue. And I appreciate it. It is really our 
number one and number two issue.
    Mr. Panetta. Agreed. Thank you, Mr. Secretary, I appreciate 
that.
    Secretary Perdue. Thank you.
    Mr. Panetta. I yield back my time, and I would give 5 
minutes to Mr. Johnson, from South Dakota.
    Mr. Johnson. Thank you, Mr. Chairman. Mr. Secretary, thanks 
for being here today. We have had some discussion today about 
labeling, with regard to protein beef specifically, and I want 
to continue on that line of discussion, if that is all right. 
Of course, you get it. Folks in cattle country have some 
discomfort with the FSIS label of Product of the USA. And there 
is some comfort level on a lot of the AMS quality claims, and 
of some of these verified programs, like Certified Angus Beef. 
I am not sure there has that same sense of accuracy and 
validity with regard to the Product of the USA.
    Now, you have told us that you have an idea about how to 
proceed. I want to make sure I heard that right. And then if 
you have any idea about a timeline, or what the way forward 
might look like, I would be interested in that.
    Secretary Perdue. Yes, I think we are in a serious 
discussion. This is something we have been talking about for a 
number, as we hear the concerns, obviously, as you know, from 
cattle country. They don't quite understand why we can't just 
go back to COOL, and you all do, but it is a very politically 
populist type of thing that is not going to happen unless we 
want to do a billion-dollar litigation damage with Mexico and 
Canada. We are trying to thread the needle, honestly, with 
transparency so the consumer can know what they get, while also 
helping the producers to feel like they are getting value for 
cattle that have been grown and processed here.
    Mr. Johnson. If you have something that wasn't fully a 
product of the USA, as you look to thread that needle, what 
would be the new label that----
    Secretary Perdue. The choice--the choices--excuse me for 
interrupting. I think the choices the industry would love to 
have born, slaughtered, and processed in the United States. 
That, we believe, would violate the WTO suspension agreement. 
We think there has to be a middle ground of slaughtered and 
processed here, which is a different distinction than just 
processed in the United States. As it currently is, imported 
meat could come in, and you could cut it up and package it. 
That means processed in the United States. But slaughtered and 
processed means that live animal is here, and it was 
slaughtered and processed here in the United States. I think 
that is a better deal.
    Mr. Johnson. And I agree that the consumer deserves some of 
this additional information, and what you are talking about 
really does provide the consumer with a better insight into 
what is going on with that particular beef product.
    Secretary Perdue. And those would be voluntary labels, 
also.
    Mr. Johnson. Okay. Moving to the Brazil issue, there has 
been a fair amount of, in shoregrass country, I am not sure 
people understand exactly what is happening with allowing 
Brazil to import beef into the United States. Can you talk to 
me a little bit about what processes are we putting into place 
to make sure that the American consumer can have confidence 
that Brazil has it right? Because, as you know, Mr. Secretary, 
there have been a number of times in the past when Brazil has 
not had it right.
    Secretary Perdue. And that really should give comfort, 
Congressman, that we have suspended them because they didn't 
get it right. They have had difficulty in fraud in their 
inspection system, and when we detected that on inbound 
inspections, we suspended them. Suspended them for over 2 
years. But in countries where we have trade agreements there, 
aside from just outright protectionism, we have to have 
equivalent safety standards.
    That is what FSIS does. They go down and do audits of their 
food safety inspection system to make sure that they believe it 
is equivalent to U.S. systems, and then, as a safeguard beyond 
that, we also have a stepped up inspection. Not an audit, but 
an inspection of the product coming in to make sure they are 
continuing to comply.
    Mr. Johnson. And do we have a sense of how long that 
heightened inspection regime will be in place?
    Secretary Perdue. Not necessarily. It will be dynamic, as 
we see continued compliance over a period of months or years. 
You probably could see some relaxation to see that they are 
continuing to comply.
    Mr. Johnson. I would close with just a couple of thank 
yous. I mean, you did work with a number of us to move the 
cover crop prevent plant harvest date last year during a true 
emergency situation. Of course, we don't know exactly what the 
weather in 2020 is going to look like, but if we get another 
terrible situation, hopefully there will be an open mind at 
USDA about similar flexibility for producers.
    Finally, I am hearing increasingly from school nutrition 
experts that they really feel like they have a partner at USDA 
to try to get it right. I know you have an open rulemaking. I 
don't expect you to comment at length, but thank you for your 
work, sir.
    Secretary Perdue. We hear the same thing, where the trash 
can's not quite as fat as it once was.
    Mr. Panetta. Thank you, Mr. Johnson. I now yield 5 minutes 
to Mr. McGovern from Massachusetts.
    Mr. McGovern. Thank you very much, and thank you, Mr. 
Secretary, for being here. I have some questions on SNAP. I 
remember a time when you came before this Committee when you 
first became Secretary that I thought we were in sync on the 
SNAP Program. I asked you, when you became Secretary, I wanted 
some assurances that you were a strong defender of the program, 
and I asked your views of the program because I was concerned 
about some of the rhetoric coming out of the Administration. 
And you responded to me, and I quote, ``But as far as I am 
concerned, we have no proposed changes. You don't try to fix 
things that aren't broken.'' That is your quote.
    And then the Congress passed a farm bill that rejected 
proposals that would throw millions of people off the benefit. 
And then the Administration, in defiance of Congress, goes 
forward with some proposals that would adversely impact very 
vulnerable people. And the first proposal dealt with able-
bodied adults without dependents, ABAWDs, the proposal that you 
proposed last year. You appeared before this Committee, and I 
asked you if USDA had any detailed data on this population, 
because I told you that we were hearing from people that this 
is a very complicated population. It included returning 
veterans, it included young kids just graduating out of foster 
care. And you said you did, and you would get back to us, and 
USDA did get back to us.
    And what I received from USDA was that USDA only knows 
three things about this population, their age, their race, and 
their citizenship status. That is it. I asked if the group 
included veterans, they didn't know. I asked if the group 
included young people who had recently aged out of the foster 
care system, they didn't know. I asked if this group included 
people who were recently released from prison, they had no 
idea. I heard your assurances to Ms. Adams that you are 
granting waivers, but the criteria is much more strict, and by 
USDA's own estimation, over 700,000 people will lose their 
benefit. Now, you add that to your proposed change with regard 
to categorical eligibility, essentially getting rid of it, and 
the other changes you have, there are another 3.1 or 2 million 
people, by USDA's own numbers, that will lose their benefit.
    Now, in your testimony here today you said that the USDA 
serves out our motto, ``Do right, feed everyone''. Well, when I 
add all this up, by USDA's own numbers, close to four million 
people are going to be thrown off this benefit. Four million 
poor people who get a SNAP benefit that is on average of about 
$1.40 per person per meal. Where are they going to get their 
food? How are they going to deal with this? And this ABAWD 
population in particular, again, is a very complicated 
population. Talk to faith-based groups, talk to food banks, 
talk to social service agencies. They will tell you how 
complicated this is, and yet you are making proposed rules 
changes, and USDA has no data on who is actually going to be 
impacted. I guess the question is how can you do this?
    Secretary Perdue. Mr. McGovern, we are not allowed to 
collect that information that you talked about, the various 
segments there. The state implements these rules, and we have 
no way to collect that information.
    Mr. McGovern. Well, with respect to not knowing who this 
population is, and then to cut them off when we have a lot of 
data from states, and from other organizations that deal with 
these people, who they are, returning veterans who are having 
trouble re-integrating into our workforce, people who live in 
rural areas who have no access to transportation, the closest 
workforce training center may be 20 miles away, who don't have 
access to a job, I mean, when those people lose their benefit, 
they lose their food benefit. How making somebody hungry is 
going to make them more likely to get a job is beyond me, and 
that is before we get into the other rules changes.
    Again, four million people, by USDA's own estimation, are 
going to lose their food benefit. I think that is shameful. I 
don't know how that is consistent with the motto: ``Do right, 
feed everyone.'' And I am going to tell you, we are fighting 
you in court, and we are going to do everything we can to block 
the implementation of this. I hope that we will get through 
this year, and then come next year we have a new set of people 
running our agencies who actually would be offended by throwing 
four million people off their benefit. I yield back.
    Mr. Panetta. Thank----
    Secretary Perdue. I would love the opportunity to have to 
respond, but it looks like time is up.
    Mr. McGovern. I am happy to sit here and listen to the 
response, if the chair wants to let you.
    Mr. Panetta. Please, Mr. Secretary.
    Secretary Perdue. Mr. McGovern, in 2000 we had 17 million 
people on food stamps. I don't know where all those poor people 
were you are talking about there. That is just a few short 
years ago. And during the recession, when our unemployment went 
up, we had 44 million people on food stamps. Unemployment, in 
the longest economic boom we have seen here, unemployment at 
3.5 percent, all I am doing is implementing the law that was 
passed into this year that says the Secretary may waive the 
application of the work requirement to any group of individuals 
in a state if the Secretary makes the determination that the 
area in which the individual resides. You know the law says----
    Mr. McGovern. I do.
    Secretary Perdue.--120 days if you are an able-bodied adult 
without dependents.
    Mr. McGovern. Right. And, Mr. Secretary, you are hurting 
people.
    Mr. Panetta. Thank you, Mr. Secretary. Thank you, Mr. 
McGovern. I yield 5 minutes to the co-chair of the Ag Research 
Caucus, Mr. Davis from Illinois.
    Mr. Davis. Thank you, Mr. Chairman, and, Mr. Secretary, 
thank you again for being here. Ag research ultimately plays a 
major role in our nation's economic prosperity, national 
security, and public health. With the current crisis that we 
are facing right now with the coronavirus, and the potential 
link to an animal source, how can we help the Department be 
better equipped to combat not only this strain, but future 
strains and diseases that can be transmitted from animals to 
humans, either through agricultural research, or other USDA 
programs that might help prevent future public health threats?
    Secretary Perdue. The budget has been mentioned several 
times here today. I will do an Appropriations hearing later, 
but if you look at the proposed budget this year, from a 
research perspective, you are going to see quite a bit of bump 
in that just to address the very issues that you mentioned.
    Mr. Davis. Well, thank you, Mr. Secretary. One of my 
biggest priorities since coming to Congress is in bolstering 
funding for ag research. I really appreciate working with you 
and your team on these ag research issues. I worked alongside 
my good friend, the acting Chair, Mr. Panetta, to co-chair the 
Ag Research Caucus, and we want to ensure that we are 
continuously increasing funding for AFRI programs. We hope to 
see appropriators, and I hope you can mention this during your 
testimony when you go see the ag appropriators, I hope we can 
also raise the money that is in AFRI, and I appreciate the 
President's request for increased funding for AFRI, but it is 
essential for us to move to the next level of research to fund 
the AGARDA Program, Agriculture Advanced Research and 
Development Authority. And I certainly hope that is something 
that we can work with your Department on to provide solutions 
in a high risk type of reward.
    Secretary Perdue. I think that fits right in, Congressman, 
with our new Ag Innovation Agenda that we have announced at the 
Ag Outlook Forum, and we would be happy to support that.
    Mr. Davis. Well, thank you. You actually got into my next 
statement was about the Ag Innovation Agenda. I appreciate it, 
we appreciate the work that you are doing. Thank you for 
sitting here, and thank you for letting me come back to get in 
front of Yoho to ask questions.
    Secretary Perdue. Thank you.
    Mr. Davis. I yield back, sir.
    Mr. Panetta. Thank you, Mr. Davis. I now yield 5 minutes to 
Ms. Torres Small from New Mexico.
    Ms. Torres Small. Thank you, Mr. Chairman, and thank you to 
the entire Agriculture Committee. It is an honor to get to join 
you on this Committee. And I am grateful to get to advocate and 
represent the 10,000 farms in New Mexico's 2nd Congressional 
District, famous for our dairy, our pecans, our pistachios, and 
certainly our chile peppers. Thank you so much, Secretary 
Perdue, for knowing that, and for all that you do for rural 
America.
    When I talk with farmers, one of the first things I hear 
about are labor shortages. And, Secretary Perdue, thank you for 
your commitment to this issue as well. The last time you 
testified before this Committee, you spoke about the access to 
legal and stable workforce so American-grown products will 
continue to feed our nation and the world. And just this 
morning, I appreciate your comments about working with Congress 
to help find a solution.
    The House passed H.R. 5038, the Farm Workforce 
Modernization Act with overwhelming bipartisan support, and I 
look forward to seeing our Senate colleagues engage on the 
subject. I strongly support a workable year-round visa system 
for our dairy farmers. And on that note, on the specialty crop 
side last year, you mentioned that you were working with 
Departments of Labor, Homeland Security, and State to make the 
application process for your training programs. When will the 
USDA application portal be ready?
    Secretary Perdue. The Department of Labor regulations are 
at OMB now. Hopefully they will be released very soon for 
comment, and we are looking forward to that, because a portal 
will be there. We have to have the rules there for the portal 
to be effective.
    Ms. Torres Small. Have they given you a ballpark date?
    Secretary Perdue. OMB?
    Ms. Torres Small. That is something you are eagerly 
awaiting?
    Secretary Perdue. We are waiting, right.
    Ms. Torres Small. Okay. That is very good to know, if we 
can help, so that would be the next near-term milestone for 
that. Do you have a----
    Secretary Perdue. We would hope this year.
    Ms. Torres Small. Okay. Thank you. What other specific 
steps is USDA taking to make it easier for farmers and ranchers 
to access the labor they need?
    Secretary Perdue. Again, on the website we try to give 
almost all the documents and the things that you will need in 
order to comply, so education is one thing. Kristi Boswell, as 
I mentioned, we deal one on one with producers coming in that 
have issues over visas and other things.
    I think the other exciting possibility is, both for Mexico 
and Central America, but Guatemala and other Central American 
countries, developing a pool of workers, almost like they do 
for Canada, a pre-certified group of people. And I know that 
the Secretary of Agriculture in Mexico is concerned about their 
poor peasant population in southeastern Mexico, so we would 
love to work with those states, and there has been a--Guatemala 
is already--we have already signed an agreement, and to help 
that we will facilitate the State Department visa moving 
forward.
    Ms. Torres Small. Thank you, Mr. Secretary. I also really 
appreciate your comments about trade, not aid, and I am pleased 
that we are making some strong advancements in that. I 
appreciate the discussion when it comes to the USMCA about 
Mexico, and how do we make sure they are not restricting the 
cheeses. I wanted to go into another piece of the dairy, which 
of course is Canada's agreement. What steps will USDA take to 
ensure Canada complies with the terms of the agreement and 
eliminates their Class VII pricing system?
    Secretary Perdue. Sure. We will keep an eye on this Class 
VII and make sure there has not a circumvention or violation of 
that. These agreements that Ambassador Lighthizer's writing, 
and USTR, are pretty legally contract enforceable type 
provisions, and I am encouraged by that.
    Ms. Torres Small. And one thing about those provisions is 
making sure not only they are eliminating this Class VII 
system, but they are not reconstituting a similar one. Anything 
to add there?
    Secretary Perdue. Yes. That is what I was mentioning with 
the circumvention of creating a loophole in that area. I think 
they are tight enough not to do that, and we will be watching 
to call their hand on it if they do.
    Ms. Torres Small. And please let us know if you see any 
challenges. Last, just briefly, I appreciate that you brought 
that map, the MFP 2 map, and I was wondering if you'd show it 
again? I do deeply appreciate making sure that we are providing 
support as we are affected by trade. I know that there are a 
lot of different crops that were covered in that. Other 
important products, one of which is dairy, supporting the dairy 
industry. New Mexico is top ten in the dairy industry, and it 
is a bright white there, so I look forward to working with you 
to make sure New Mexico gets the support it needs.
    Secretary Perdue. Get your share.
    Ms. Torres Small. Thank you.
    Secretary Perdue. Burn me up with that green chili.
    Ms. Torres Small. I yield the remainder of my time.
    Mr. Panetta. Thank you, Ms. Torres Small. I now yield 5 
minutes to the gentleman from Minnesota, Mr. Hagedorn.
    Mr. Hagedorn. Thank you, Mr. Chairman. Mr. Secretary, it is 
great to see you again. I want to thank you for traveling to 
our district in Minnesota to have a roundtable discussion in 
Mankato, and also to attend Farm Fest. We enjoyed you holding 
up our USMCA Now sign, and also for the other folks in the 
Administration who have helped at USDA and been on the ground 
in our district under Secretary Northey, was at the Albert's 
dairy farm in Dodge County, and then this weekend, Under 
Secretary Ibach will be at a hog farm, the Compart hog farm in 
Nicollet County, so we appreciate you being on the ground, and 
meeting the farmers, and getting to know what is on their minds 
continuously.
    Lots of politics today. You heard from people talking about 
trade, and had some criticisms, but I will tell you what I hear 
a lot, and that is it shouldn't have been left to this 
President to deal with China on trade. That should've happened 
a long time ago, where we had Presidents of both parties that 
kind of let things get to a point, and we appreciate the fact 
that he's taking it on. A lot of our farmers do. And the fact 
that we were able to pass the USMCA trade agreement to help 
build momentum for other deals, and we are seeing that now with 
phase 1 with China, hopefully we get to phase 2.
    But, there is something going on in China, as you know, 
this coronavirus, and it seems to be hampering perhaps our 
exports of pork, and turkey, and beef, and there seems to be a 
little backup there now, maybe as much as 11 percent, it says, 
for pork storage, and then 12 percent for poultry. Are you in 
any way dealing with what is going on, as far as the backup and 
the storage issue?
    Secretary Perdue. Well, dealing, we are trying to be aware 
with our eyes on the ground there. We see some easing of that. 
More people are getting back to work at the ports, and we see 
some of that backlog continue to be unloading now. Hopefully, 
we are over the worst of that, and can move forward.
    Mr. Hagedorn. Well, that is very good. Moving on to African 
Swine Fever, we have been talking about that quite a bit, and 
everybody wants to talk about coronavirus, and rightly so, but 
this African Swine Fever, as you know, presents quite a 
challenge to us, to make sure we keep that out of the country, 
and that we can even export more pork products. Recently we 
passed a bill that the Senate sent over. It was along the lines 
of one that I put in, to increase the number of inspectors at 
our points-of-entry, and have more of the beagle brigades, 
which are very effective in sniffing out that pork.
    Secretary Perdue. Right.
    Mr. Hagedorn. I always joke that they are so good we should 
take them down to the Appropriations Committee, try to drive 
down the deficit with those beagle brigades. But, when you look 
at what is going on, we appreciate the increase in the line 
item for swine health. That was very good. But you talked a 
little bit recently with our colleague from Kansas about the 
NBAF, I guess we would call it, the acronym. How does that fit 
in with what we are doing on African Swine Fever, and are you 
making some plans along those areas?
    Secretary Perdue. Well, obviously it is not operational yet 
completely, but it will be a huge part in all the dangerous 
global diseases that we face, African Swine Fever, and some we 
don't even know the names of yet that will happen. Research 
will be done, that'll be tested over the effects, and also 
research from how we can prevent that, regarding vaccines, and 
what the genome makeup is of that disease, and the viruses or 
whatever organism carries that disease. It will be a really 
great tool over some very serious types: foot-in-mouth, African 
Swine Fever, Ebola, those kind of things that have zoonotic 
potentials there at NBAF.
    Mr. Hagedorn. Do you expect that will go online 2022?
    Secretary Perdue. Probably 2022 to 2023.
    Mr. Hagedorn. Okay. Thank you. Last, just an observation, I 
appreciate what you are doing on the regulations with SNAP. 
That is an issue I have been working on since I served 
Congressman Strangeland, who was a Member of this Committee 
many, many years ago, and the concept of work for welfare for 
able-bodied people has always worked. And in this environment, 
where we have very low unemployment, we want everybody in the 
workforce. It is a compassionate thing, and if people are able-
bodied, I think it is the right thing to do. I appreciate you 
tightening up the rules, and pushing that forward. It is going 
to help a lot of people.
    Mr. Panetta. Thank you, Mr. Hagedorn. I now recognize the 
gentleman from Florida--excuse me, the lady--Ms. Pingree.
    Secretary Perdue. The Chairman----
    Mr. Panetta. Recognize Ms. Pingree.
    Secretary Perdue. The Chairman would never forget about 
you.
    Mr. Panetta. No.
    Ms. Pingree. Almost. Well, Mr. Secretary, thank you so much 
for being with us today, and for putting in 3 long hours. The 
good news is we are about to vote, so eventually we are going 
to have to let you go. But I am really grateful I have had a 
chance to listen to a lot of the hearing, and I know you have 
tackled a whole range of questions, and given us a lot of 
thoughtful answers.
    I want to just talk a little bit about your sustainability 
initiative, part of the Agriculture Innovation Agenda. You set 
a goal of reducing greenhouse gas emissions from U.S. 
agriculture by 50 percent by 2050, so thank you for recognizing 
the importance of this, and the integral role farmers can play 
in climate conversations. I think that is critically important. 
I introduced a bill last week called H.R. 5861, the Agriculture 
Resilience Act, which I sort of see as a roadmap for a lot of 
the things that we need to do around sequestering carbon in 
soil, and we have a lot of overlap in your innovation agenda 
and my bill around improving data collection, identifying 
research gaps, enhancing carbon sequestration, so I am looking 
forward to working with you on that. I am interested in knowing 
what some of your next steps for moving forward on the 
innovation agenda is, and how we can be more helpful in 
Congress.
    Secretary Perdue. You mentioned one of those. I look 
forward to looking at your legislation as to how we can sync up 
there. A baseline measurement is one of those things. There was 
some effort made in 2010, and we did something initially there, 
and it just kind of got off the radar screen, so we would love 
to have a baseline of how we are moving. That scoreboard that 
we did at Ag Innovation Summit, if you are not keeping score, 
you are just practicing, you are not really serious about it. 
We wanted to develop metrics of sensor technology, and metrics 
over what percentage of carbon are we capturing through these 
practices, how can we do that, and that is where we plan to go.
    Ms. Pingree. That is great. That is critically important. I 
will just tell you I look forward to you guys looking through 
the bill and having a longer conversation with you about it. 
Some of the things in that bill you can do with existing 
authority, things like making composting a practice within EQIP 
or CSP. I hope we can find ways to work together as you are 
doing this, and if some of those things are favorable to you, 
and we don't have to go through legislation, that would be 
great.
    The one last thing I wanted to talk to you about, there has 
been so much interest in modernization of environmental 
services that farmers provide. I know we have talked about this 
before, but how are you working towards the USDA helping to 
foster some of those private-sector efforts? And I know, 
honestly, what you just said is sort of starting with a 
baseline is critically important, but I see a really serious 
role for USDA here in understanding how to monetize some of 
that.
    Secretary Perdue. I think what the Ag Outlook Forum talked 
about, a public-private partnership of synchronizing our public 
dollars and our private dollars, and USDA is an appropriate 
convener of where we are. We ought to be about asking the 
questions, and what we are doing is convening stakeholder 
groups and saying, what are the limitations? Let's imagine what 
can happen if this were solved, and put our researchers to 
work, but public and private, in doing that. That is kind of 
where we would like to head.
    Ms. Pingree. Yes, and I think that, again, there has to be 
a potential role for farmers to participate in carbon markets, 
and some of that has to do with, as you said, understanding 
what the baseline is, but also having a common set of 
measurements, because there is a lot of research going on at 
the university level and the private-sector. I know you are 
looking at it at the USDA; but, again, that is an important 
convening role for you to play.
    I am just really appreciative that in a time when it is 
hard to get everybody on the same page around what is going on 
with the climate, or what the appropriate role for farmers is 
in carbon sequestration, that you have come out and started 
talking about it, engaging farmers. One of the things I tried 
really hard to do in my bill was to look at how we treat 
farmers as our partners. It is all too often in this debate 
where people try to point the finger and say, ``It is all your 
fault,'' but the role that agriculture can play in sequestering 
carbon in the soil isn't very well understood. Even with the 
environmental sector people don't often understand how 
important that is, and how so many of the practices that we can 
continue to encourage at the USDA, like no-till, and cover 
crops, and increasing the organic matter in the soil.
    I am looking for a way to move forward on that to help 
people to understand the role, to engage farmers, and sort of 
what works best for them. I have written 180 pages in a bill on 
that, so it is very thorough and detailed about what we could 
do.
    Secretary Perdue. Good, we look forward to looking at that. 
You are exactly right, though. In the possibility of, really, a 
win-win situation, where you sequester carbon in the soil, and 
taking it out of the air, but also that is increasing soil 
health and productivity, so it is really a win-win situation.
    Ms. Pingree. Absolutely. Every farmer we have ever met with 
that we talked to who has taken some of these steps have seen 
better water retention, increased yields, all kinds of good 
things. I yield back, but thank you for putting in your time 
here. Thanks so much.
    Mr. Panetta. I thank the gentlelady from Maine. I now 
recognize the gentleman from Florida, Mr. Yoho.
    Mr. Yoho. Thank you, Mr. Chairman. Mr. Secretary, always 
great to see you, and I appreciate the job you are doing, the 
leadership that you and the Administration are doing. I stand 
100 percent behind you. A lot of talk about COVID-19, the 
coronavirus. As you know, we have dealt with that in veterinary 
medicine for decades, cattle, horses, dogs, and cats, and we 
have very effective vaccines for it. We have introduced a bill, 
it is a bipartisan bill with Kurt Schrader, the other 
veterinarian in Congress, H.R. 3771, the one health bill that 
coordinates the cooperation between USDA and HHS. As you well 
know, six out of ten human diseases show up first in animals, 
and so this is a way that we can study that, be prepared, and 
it is a perfect example of that is, number one, coronavirus. 
Lyme Disease, we saw that in veterinary medicine for a long 
time; and eventually, the human side picked up on that, and mad 
cow disease, BSE. We know these things are here in the animal 
world, and so the idea behind one health is to coordinate that 
effort so that we can identify these things before they become 
a pandemic. I just want people to know that is coming out.
    I was happy to hear your conversation about labor. As we 
know, our farmers face many uncertainties, whether it is 
commodity prices, weather factors, trade policies, and the 
availability of labor. I agree 100 percent with you that we 
should remove the labor issue for agriculture from immigration 
and concentrate on a guestworker program that doesn't prevent 
anybody from becoming a citizen, but it doesn't give them the 
pathway. We are introducing our bill today that I have talked 
to you about, I have talked to the Administration, and we have 
shared it with 70 Members of the House and the Senate. It is 
called H.R. 6083, the Labor Certainty for Food Security Act. 
The goal is to create a predictable, reliable, certain 
workforce for our producers, but give opportunity to our 
workers, and this is both H-2A, for the temporary, and it 
creates a year-round program. We get rid of AEWR, and we put in 
safeguards for that. We allow the flexibility of the workers to 
move around the country, and I sure hope you consider this, 
because this is a solution for our ag producers that it is so 
needed in that.
    It is been brought up about ASF, African Swine Fever. You 
are certainly aware of the outbreak, where it is estimate over 
500 million pigs have been lost in China. The virus is very 
hardy, surviving high and low temperatures, and it can survive 
the transport from China to here, and it can last in the 
fomite. Feed products, cardboard, things like that, haven't 
been thoroughly studied, and most of that stuff comes into our 
ports here in the United States. The beagles are a good tool, 
but I don't think they are scientifically as accurate as we 
need. I mean, I will take them now, every day, what I would 
like to ask you is do you feel that the USDA has enough funding 
for resources and technology to bolster increased inspection? 
Because we know how little the containers are inspected.
    Secretary Perdue. Yes, it is a needle in a haystack issue, 
and it is very anxious in that regard.
    Mr. Yoho. It is.
    Secretary Perdue. We do have a good working relationship 
with Customs and Border Protection. I have gone into borders 
and witnessed that. Obviously you all have authorized recently 
some more inspectors at the border. The problem is, is there 
ever enough, what is safe in that regard, and how do you 
determine that? That is a real challenge, but we are trying to 
do our best to determine what the risk is versus what the need 
is.
    Mr. Yoho. We know what the percentage is being inspected, 
and what the percentage is not. I don't want to bring that out 
right now, but I think that is something we all need to look at 
bolstering. And last, the USMCA was passed. All nations need 
trade, but it needs to be fair trade. As you know, my State of 
Florida, our vegetable producers have been crushed by the 
competition, primarily from Mexico, seasonality, or the 
seasonally competitive crops. My ask is, as we move forward, 
that close monitoring of the labor standards, environmental 
standards, subsidies coming from the Mexican Government, and a 
rapid and quick response from this Administration, USDA, USTR, 
that they respond rapidly. We have just seen an inverse of the 
production of blueberries, squash, green peppers, any row crop. 
It is a complete reversal from 5 to 10 years ago. And we are 
not playing on a level playing field, and I sure hope that we 
can have some fixes for our producers.
    And, just one last comment on the labor. We are either 
going to import our labor, or we are going to import our food, 
and we need to make sure that our policies are in place so that 
we can protect our farmers. And I yield back, and thank you for 
what you do.
    Mr. Panetta. Thank you, Mr. Yoho. Just to let you know, Mr. 
Secretary, votes have been called, but it looks like we have 
two more Members, we are just going to get through those two 
real quick, if that is okay. Thank you. I recognize the 
gentlewoman from Iowa, Mrs. Axne.
    Mrs. Axne. Well, thank you, Mr. Chairman, good to see you.
    Secretary Perdue. Thank you, ma'am. Yes.
    Mrs. Axne. As you know, I represent the southwest corner of 
the State of Iowa, and our rural counties are the backbone of 
agriculture in our state. A lot of our rural economy depends, 
of course, on how corn and soybean farmers are doing, and these 
folks have had a tough time over the last few years due to 
devastating weather, demand destruction caused by the abuse of 
small refinery exemptions and the EPA, and, of course, the 
Administration allowed this to happen, and the uncertainty of a 
long trade war. These issues have absolutely hurt Iowa very 
hard. Iowa farmers hold the highest level of debt in the 
nation. Forty-four percent say they are struggling to cover 
bills, and farm bankruptcy in the state is at a 10 year high. 
With all these issues, and the fact that a majority of Iowans 
are small or mid-sized farms, I was particularly disturbed when 
you suggested last fall that smaller farms aren't going to 
survive. As a matter of fact, you put it in America, the big 
get bigger, and the small go out.
    It is your job to keep that from happening, and we are here 
today to discuss the state of the rural economy, and with 
things as grim as they are, it is really discouraging for my 
constituents to hear from the Secretary of Agriculture that 
their best option may just be to sell their family farm. The 
last thing our folks need is additional stress and uncertainty, 
so I am hoping that your testimony today will provide some 
reassurance to my constituents. And I am very glad that we got 
USMCA signed into law, and I am thankful for your announcement 
of the Higher Blends Infrastructure Incentive Program, as well 
as the Department's work on the China phase 1 agreement. 
However, a lot of my folks have questions about whether the 
Chinese commitment for ag purchases is realistic.
    Iowa farmers are on the front line of this trade war, and 
have taken a lot of the hit for this. It is imperative that the 
agreement results in gains for Iowans. Last month USDA's own 
Chief Economist estimated that exports to China would only be 
$14 billion at the end of the third quarter, which is a heck of 
a long way from the $36\1/2\ billion goal for 2020 that was 
agreed to. My question, Mr. Secretary, is do you expect that 
China will be able to meet its commitments, and what 
commodities do you expect to benefit the most under the phase 1 
agreement?
    Secretary Perdue. We are expecting China to live up to 
their agreement. The underlying, under the radar, technical 
issues are being worked on fairly expeditiously. I think that 
leads to their ability to accomplish those hardline goals, but 
we are going to trust, but verify as we go along. And, looking 
on a week by week, month by month basis of where they are in 
that regard, there are unilaterally enforcement mechanisms to 
enforce that commitment, and money--and things they have agreed 
to, so we do. We think the WASDE report that you mentioned, it 
was stated in the preamble that it did not include the phase 1 
agreement in that effort. So the export numbers that you talked 
about we expect will grow.
    Mrs. Axne. Okay, great. And which commodities do you expect 
should receive the most benefit?
    Secretary Perdue. Well, I think all commodities, when the 
non-public part of the agreement, and the $40 to $50 billion of 
U.S. ag exports were not identified by sector purposely because 
the Chinese wanted the ability to come into the marketplace as 
fair buyers in that regard, so we think all sectors, or really 
a huge majority of that, of the agricultural sector, will 
benefit. Certainly your farmers in Iowa, from a corn, even 
ethanol perspective, DDGs, those kind of things we think will 
have a great potential of helping China achieve those numbers. 
Things that we have not sent over there recently, such as 
ethanol byproducts.
    Mrs. Axne. Okay. I am glad to hear you say DDGs, so I 
appreciate that. I would like--if you can give us any follow up 
on, as we move down the road, what we can expect to see for 
ethanol and DDG, I would be really----
    Secretary Perdue. Yes, these tracking documents will be 
public for--to be seen as how we are doing on those issues.
    Mrs. Axne. Okay. Moving on, I just wanted to ask you real 
quick here as well, how is the USDA estimating potential 
purchases in the commodity market forecast reports, and how are 
you making sure you aren't adding to the volatility in the 
commodity market?
    Secretary Perdue. Our NASS reports, you are referring to?
    Mrs. Axne. Yes.
    Secretary Perdue. That's consistent protocol, we mentioned 
earlier, when you were out, that the disturbing Crop Acreage 
Data Report that came about in the summer was because it was 
out of line. The NASS report was out of line with market 
expectations because of the wet spring that prevented 
plantings. As it turned out, Mrs. Axne, the NASS was right, and 
the market was wrong. It created a huge drop in price because 
the markets, and all the traders and estimators thought there 
was going to be less corn than there was. WASDE had much more. 
Farmers thought it was a conspiracy to drop down prices, but at 
the end of the year, the NASS report was much more consistent 
with where the production was than the other people in the 
private-sector.
    Mrs. Axne. Okay. Thank you so much.
    Secretary Perdue. Okay. And I wish you knew me better. 
Maybe we can get to know better, you will know that nobody 
fights harder for the American farmers, and the quote you took 
out of context. I would love the opportunity to talk to you 
about that.
    Mrs. Axne. Well, I would appreciate that. It is what you 
have said. If you want to set up a time so we can get to know 
each other better, I would----
    Secretary Perdue. It is what was quoted, but we can all be 
clipped in a way that is not accurate.
    Mr. Panetta. Thank you, Mr. Secretary.
    Mrs. Axne. Thank you.
    Mr. Panetta. I now recognize the gentlelady from Arizona 
for 5 minutes.
    Mrs. Kirkpatrick. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary for being here.
    Secretary Perdue. Thank you for your patience.
    Mrs. Kirkpatrick. Yes. Contrary to the popular belief that 
Arizona is all desert, we have some beautiful forests, and we 
are coming up on our wildfire season. And so I want to just ask 
you quickly, we have seen an increase in temperatures, a 
decrease in moisture, and this has caused a rise in wildfires. 
And I am sure you are well aware of that, so I am going to get 
briefly to my question, which has to do with the wildfire 
funding fix. How will that fix help you better manage 
suppression efforts, and how do you expect the funds will help 
impact other aspects of Forest Service work?
    Secretary Perdue. Okay. Two ways. The fire funding fix 
allows us to take the appropriations that you give from forest 
management and do active forest management. That is the 
prevention phase of that. Then the other part of is that we can 
treat forest fires like we do other disasters, and spend the 
money expecting that to be replenished in that way, at that 
level, so it is really about bifurcation. But the most 
important thing is, due to the active forest management, to 
prevent the forest fires. We would much rather prevent them 
than suppress them.
    Mrs. Kirkpatrick. Yes, absolutely. We have seen some money 
going into thinning the forests, picking up the shrub----
    Secretary Perdue. Yes.
    Mrs. Kirkpatrick.--that certainly helps us manage better. 
Because they called votes, I am going to yield back the balance 
of my time, but again, thank you very much for being here.
    Secretary Perdue. Thank you.
    Mr. Panetta. Thank you, Mr. Secretary. Before we adjourn, I 
invite the Ranking Member to make any closing remarks he may 
have.
    Mr. Conaway. Well, a couple things. First off, Mr. 
Secretary, thank you again for the great job your team does. 
Great leadership from you, but executed by an awful lot of good 
folks over there. I also want to thank Bill Northey, and 
Richard Fordyce, and Kevin Norton for coming over yesterday and 
spending a long time with the full Committee, going over all 
these staffing issues, hirings, challenges, all the things that 
you have been harassed about this morning. They are doing a 
terrific job, professional job of addressing that. They 
understand the problems associated with the moves to Kansas 
City, and all the things going on, so thank you for their good 
work.
    I also want to quickly comment on the SNAP changes you are 
making. Throughout the farm bill negotiation with my colleagues 
in the Senate, they assured me over and over and over again, ad 
nauseum, that you had all the authority that you needed to do 
what you are doing with respect to the ABAWD rule, and broad-
based categorical eligibility, and that the House-passed 
version did not need to be included in the conference report. 
My colleagues on this, Mr. McGovern is particularly passionate 
about this issue, but passion doesn't necessary create good 
policy, and good policy is that the rules in place from the 
1995 Act have said able-bodied adults under the age of 50 with 
no dependents should work, or train to work, 20 hours a week in 
order to stay on food stamps on an extended basis, and you have 
the authority to waive that particular rule in places where it 
makes sense, in the rural areas, or where there are no jobs. 
All of the folks that Mr. McGovern talked about have an ability 
to be waived.
    The rule also applies a 12 percent exemption, for every 
state to exempt 12 percent of their ABAWD population all the 
time, and so there is plenty of flexibility to address all 
those folks. And, again, passion doesn't make good policy. Your 
changes to the rules does make good policy. I wish we could 
have gotten them into the law that you are now operating under. 
Again, thank you, and your team especially, for all the hard 
work they do, and I yield back.
    Mr. Panetta. Thank you, Mr. Conaway. Mr. Secretary, once 
again, I really, truly appreciate every time you come to this 
Committee and demonstrate your thoughtful, and your 
knowledgeable answers to all of us here. It really means a lot 
to all of us on this Committee. On behalf of Chairman Peterson, 
thank you very much. I also want to say thank you for the 
accessibility not just of you, but your staff, and that we have 
been able to work with them, and how often they come up here 
and talk to us, so thank you very much.
    And also, just to let you know, and as you can tell, this 
is the first time I have ever chaired a committee meeting, but 
let you know what an honor it is that you were the witness for 
the first time that I have ever been in this position, and let 
you know that I will never forget this opportunity, but also 
let you know that the people of this country, and the people in 
agriculture, will not forget your service to them, and to this 
nation, so thank you very much.
    And at this time, under the Rules of the Committee, the 
record of today's hearing will remain open for 10 calendar days 
to receive additional material and supplementary written 
responses from the witness to any question posed by a Member. 
This hearing of the Committee on Agriculture is adjourned.
    [Whereupon, at 1:20 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   Submitted Report by Hon. K. Michael Conaway, a Representative in 
                          Congress from Texas

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  Department of Agricultural          College Station, Texas 77843-2124
   Economics........................
  Texas AgriLife Research...........  Telephone: (979) 845-5913
  Texas AgriLife Extension Service..    Fax: (979) 845-3140
  Texas A&M University..............  http://www.afpc.tamu.edu D
                                                  @AFPCTAMU
 

Agricultural and Food Policy Center, Texas A&M University
March 2020
Overview of Trade Aid and Its Impact on AFPC's Representative Farms

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Cover photo courtesy USDA.
           2020 by the Agricultural and Food 
        Policy Center

Briefing Paper 20-2

  Bart L. Fischer
  Joe L. Outlaw
  J. Marc Raulston
  Brian K. Herbst
Executive Summary
    Shortly after taking office, President Trump launched 
investigations into the national security ramifications of steel and 
aluminum imports from a variety of countries and into the handling of 
intellectual property rights protection and enforcement by China. Both 
of these investigations resulted in tariffs being placed on imports 
from the implicated countries, including China. In response, these 
countries imposed their own retaliatory tariffs, with China ultimately 
imposing tariffs on more than 1,000 U.S. agricultural tariff lines.
    The U.S. farm economy was already going into the fifth year of 
recession when retaliatory tariffs were imposed by China and others. 
The Administration responded by authorizing trade aid packages for both 
the 2018 and 2019 crop years that included commodity purchases, trade 
promotion, and direct assistance to producers to help defray the costs 
of disrupted marketing. There is no denying that the aid package--
particularly the Market Facilitation Program (MFP)--has had a 
significant impact on farm income in the United States. Across all of 
the Agricultural & Food Policy Center's (AFPC) 63 representative crop 
farms, MFP 1.0 (2018) and 2.0 (2019) protected $16.4 million in net 
worth over the 2018-2020 study period. Furthermore, under baseline 
conditions (i.e., no MFP), 35 of the 63 farms had a greater than 50% 
probability of negative ending cash at the end of 2020 (i.e., needing 
to borrow on operating notes to finance shortfalls). With MFP in place, 
that number was cut by 34.3% (23 farms facing significant threat of 
shortfall).
    Some have argued that MFP 2.0 was biased toward southern states. 
While there was significant variability in county payment rates for MFP 
2.0, most of that variability is easily explained by the underlying 
damage assessments and the distribution of planted acres in the 
respective counties. And, despite the fact that the highest county 
payment rates were predominantly in counties with cotton production, 
almost 70 percent of the assistance under MFP 2.0 went to midwestern 
states. While we find little validity to the argument of regional 
inequity, there certainly were disparities between neighboring 
counties. These dif[f]erences were particularly disruptive for 
producers of crops relatively more impacted by retaliatory tariffs who 
happened to produce in counties with lower payment rates.
    Finally, we find that MFP 1.0 and 2.0 have also had a greater than 
$41 billion impact on the broader rural economy.
Introduction
    In April 2017, the U.S. Department of Commerce initiated 
investigations into steel and aluminum imports under Section 232 of the 
Trade Expansion Act of 1962. The Commerce Department found that steel 
and aluminum imports threatened to impair national security, and on 
March 23, 2018, President Trump announced that he concurred with the 
findings from the investigation and imposed tariffs on certain steel 
and aluminum imports from a number of different countries.
    In August 2017, the Office of the U.S. Trade Representative (USTR) 
launched an investigation into China's handling of intellectual 
property rights protection and enforcement. USTR found that China's 
practices were unreasonable and burdened U.S. commerce. In response, on 
July 6, 2018, President Trump imposed an initial series of 25% tariffs 
on $34 billion in imports from China. Since then, the United States has 
gone through four implemented/proposed tariff hikes under Section 301.
    In response to these actions, several countries imposed retaliatory 
tariffs--in many cases targeting agricultural products. While the 
retaliatory tariffs imposed by Canada and Mexico in response to the 
Section 232 investigation were lifted effective May 20, 2019, by the 
fall of 2019, China had retaliatory tariffs in place on over 1,000 U.S. 
agricultural tariff lines.
    With the retaliatory tariffs adding to an already precarious farm 
economy, on two separate occasions--for both the 2018 and 2019 crop 
years--President Trump stepped in to provide assistance for 
agricultural producers who were being negatively impacted by the trade 
dispute. While assistance also came in the form of commodity purchases 
and trade promotion, the vast majority was provided as direct 
assistance to producers via the Market Facilitation Program (MFP).
    This report provides an overview of the history of MFP, examines 
the regional distribution of support, analyzes the impact of MFP on 
AFPC's representative farms, and estimates the economic impact on the 
broader rural economy. The analysis is focused primarily on the non-
specialty crops that were eligible for MFP, but select specialty crops 
and animal products were also eligible.
Market Facilitation Program (MFP) Background
MFP 1.0 (2018)
    On July 24, 2018, the U.S. Department of Agriculture (USDA) 
announced that up to $12 billion in aid would be made available to 
producers, with almost $10 billion being provided through MFP for the 
2018 crop year. According to USDA (2018a), the assistance was ``in 
response to trade damage from unjustified retaliation by foreign 
nations.''
    To determine the assistance levels provided to producers, USDA 
estimated gross trade damages caused by the retaliatory tariffs imposed 
by several countries in response to the Section 232 and 301 
investigations. While we now have the luxury of hindsight, those damage 
levels were determined before trade data was available (or before lower 
trade levels could be observed). USDA utilized standard estimation 
methods to determine damage rates; this paper takes those rates as 
given. USDA (2018b) published a detailed account of its method for 
estimating gross trade damages on September 13, 2018.

    Table 1. Comparing 2018 and 2019 Gross Trade Damage Rates by Crop
------------------------------------------------------------------------
  Non-specialty
      crops             MFP 1.0           MFP 2.0            Units
------------------------------------------------------------------------
           Hay                                $2.81              Tons
     Chickpeas                                $1.48               cwt
          Corn              $0.01             $0.14                bu
        Cotton              $0.06             $0.26                lb
   Dried Beans                                $8.22               cwt
              Lentils                         $3.99               cwt
       Peanuts                                $0.01                lb
          Peas                                $0.85               cwt
          Rice                                $0.63               cwt
       Sorghum              $0.86             $1.69                bu
      Soybeans              $1.65             $2.05                bu
         Wheat              $0.14             $0.41                bu
------------------------------------------------------------------------

    Ultimately, MFP 1.0 paid on 2018 actual production of the MFP-
eligible crops at the associated rates listed in Table 1. Payments were 
limited to $125,000 per person or legal entity, with separate limits 
for three different categories--non-specialty crops, specialty crops, 
and animal products--and an overall limit of $375,000 per applicant. 
MFP 1.0 was provided in two different tranches: the first half was 
announced on August 27, 2018, and the second half was announced on 
December 17, 2018.
MFP 2.0 (2019)
    On May 23, 2019, President Trump announced that an additional $16 
billion in aid would be made available to producers, with up to $14.5 
billion being provided through MFP for the 2019 crop year. In 
implementing MFP 2.0, USDA largely followed the same methodology--
estimating gross trade damages--but they updated the reference point 
from a single year to using data over a 10 year period (2009-2018). As 
noted in Table 1, the list of impacted commodities and the associated 
rates was expanded significantly with MFP 2.0. This particular change 
is discussed in greater detail in the section on Regional Analysis.
    While the framework for estimating damages was largely unchanged 
with MFP 2.0, the application of the rates changed significantly. 
Perhaps most notably, the payment rates in Table 1 were not paid by 
crop on actual production, as was the case in 2018. Instead, USDA 
applied the rates to average production of all MFP-eligible crops in a 
county and then divided by the average acres planted in the county over 
the past 4 years. The resulting county payment rates were then paid on 
all acres planted to MFP-eligible crops on a farm in 2019 (not to 
exceed the acres planted on the farm in 2018). Payments were limited to 
$250,000 per person or legal entity, with separate limits for the three 
different categories--non-specialty crops, specialty crops, and animal 
products--and an overall limit of $500,000 per applicant.
    In hopes that the impasse with China would be resolved and the full 
amount of aid would not be needed, MFP 2.0 was provided in three 
tranches: (1) the first 50% was announced on July 25, 2019, (2) an 
additional 25% was announced on November 15, 2019, and (3) the 
remaining 25% was announced on February 3, 2020. In counties where the 
$15/acre rate applied, the full amount was paid in the first tranche.
Distribution of MFP Assistance
    Not surprisingly, the bulk of support from MFP 1.0 was provided to 
soybean, cotton, and sorghum producers, as reflected in the state-level 
payment totals in Figure 1.
    For MFP 2.0, with a significantly expanded list of commodities, 
several other areas received additional support. As noted in Figure 2, 
the soybean- and cotton-producing areas of the country still received 
the bulk of the support. While this is discussed in greater detail 
below, nine of the top ten recipient states were in the Midwest, and 
that region received almost 70% of the assistance under MFP 2.0.
    Because the purpose of MFP is to help producers adjust to disrupted 
markets due to retaliatory tariffs (and largely the tariffs imposed by 
China), it stands to reason that the aid would be concentrated in areas 
with significant production of the commodities most directly impacted. 
As noted by USDA and reflected in Figure 3, MFP payments overlap areas 
where estimated damages are the highest (when compared to Figures 1 and 
2).
Figure 1. MFP 1.0 (2018) Payments by State (as of March 2, 2020)

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Figure 2. MFP 2.0 (2019) Payments by State (as of March 2, 2020)

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Figure 3. Exports of Major Tariff Affected Commodities (2017)

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  Commodities include: Soybeans, Pork, Cotton, Dairy.
  Total Exports for these commodities: 78,326 Mil.
  Source: ERS.
Regional Analysis
    While MFP has undeniably been vital to the financial health of U.S. 
farms over the past 2 years, there have been recent complaints about 
regional bias in the Administration of MFP 2.0. Despite those 
arguments, it appears that the biggest determinant of the regional 
distribution of MFP is the underlying estimates of gross trade damage 
and the point of reference on which the estimates are based. 
Importantly, MFP provides financial assistance that gives producers the 
ability to absorb some of the additional costs from having to delay or 
reorient marketing due to retaliatory tariffs, which is perhaps the 
most misunderstood part of the program. As noted in Figure 4, three 
crops--soybeans, cotton, and sorghum--made up the bulk of agricultural 
trade with China over the past several years.\1\ These products were 
the ones most directly impacted by the tariffs--because they were the 
products being exported to China when the retaliatory tariffs were 
imposed. That is little consolation for corn producers, for example, 
that had exported up to $1.3 billion to China in 2012 but by 2017 was 
exporting just $142 million, owing in large part to actions on the part 
of the Chinese government that the World Trade Organization (WTO) has 
since found were inconsistent with China's obligations under the WTO's 
Agreement on Agriculture.\2\ For other products like beef, American 
producers have been largely locked out of the Chinese market for the 
last 20 years. But, addressing those long-term inequities was the very 
purpose of the negotiations themselves. Moreover, as previously 
discussed, the trade damage estimates for MFP 2.0 were based on a 
survey of trends in U.S. bilateral trade over a 10 year period, in 
recognition that 2017 may not have been the most representative year on 
which to base the analysis.
---------------------------------------------------------------------------
    \1\ Importantly, USDA's analysis included retaliatory tariffs from 
several countries involved, but we focus on China here for 
illustration.
    \2\ For more on these cases, see DS511 on China's domestic support 
for agricultural producers and DS517 on China's Tariff Rate Quota (TRQ) 
administration for certain agricultural products in the WTO.
---------------------------------------------------------------------------
Figure 4. Major U.S. Agricultural Crop Exports to China

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    For MFP 1.0 in 2018, USDA estimated gross trade damages relative to 
2017 trade. When looking specifically at China, soybeans, cotton, and 
sorghum made up 72% of the $19.5 billion in agricultural trade with 
China in 2017 as reflected in Figure 5. As highlighted in Table 1 
earlier, this resulted in relatively lower payment rates for some crops 
(e.g., corn at $0.01/bu).
    In response to stakeholder feedback that 2017 was not a 
representative base year for certain commodities, USDA estimated gross 
trade damages relative to 2009-2018 trade for MFP 2.0. According to 
USDA (2019), the purpose of using the longer-run trend was ``to account 
for other contributing variables, such as longstanding trade barriers 
imposed by China and other countries that have affected U.S. exports, 
as well as the longer-term impact of prolonged retaliatory tariffs.'' 
As noted in Figure 5, U.S. corn exports to China were $142 million in 
2017, compared to $393 million in 2009-2018. By contrast, U.S. cotton 
exports to China were $978 million in 2017, compared to $1.575 billion 
in 2009-2018.
Equity Between Regions
    Much has been made of the resulting county payment rates in MFP 
2.0. To make the case for southern bias in MFP 2.0, critics point out 
that McLean County, IL, received a payment rate of just $82/acre while 
Lubbock County, TX, received $145/acre. There are a lot of factors that 
drive the county payment rates, but perhaps none are as relevant or 
important as the distribution of planted acres within the county. For 
example, the $145/acre payment rate in Lubbock County is merely 
reflective of the fact that cotton (with a $0.26/lb rate) accounted for 
84% of the payment rate in Lubbock County--as noted in Figure 6--while 
corn (with a $0.14/ bu rate) accounted for 51% of the rate in McLean 
County. Had soybeans been the only crop planted in McLean County, the 
county payment rate would have been approximately $135/ac.
Figure 5. U.S. Exports to China of Select Crops in 2017 and 2009-2018

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Figure 6. Distribution of Acres Planted by Crop (Average 2015-2019)

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Figure 7. MFP 2.0 Payments by Census Region (as of March 2, 2020)

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    Put simply, counties with a significant presence of crops directly 
impacted by retaliatory tariffs had the highest payment rates. The only 
``bias'' we find in the program was the decision to impose a maximum 
county payment rate of $150/acre, which most negatively impacted cotton 
producers. As noted in Figure 7, if one looks at where the latest 
assistance has gone, almost 70%--or just under $10 billion--has gone to 
the Midwest. In other words, the amount of support provided to the 
Midwest is more than double the rest of the country combined.
Equity Between Counties
    While we find little validity to the complaints of regional 
inequity, there are certainly disparities between counties. A producer 
of a crop that was highly impacted by retaliatory tariffs (e.g., 
soybeans or cotton) that happens to produce in a county that 
predominantly grows a crop that was relatively less affected by 
retaliation (e.g., wheat) is certainly negatively impacted. The same 
logic applies to producers of irrigated crops that farm in counties 
with predominantly dryland production. To USDA's credit, the disparity 
was somewhat mitigated by the fact that Secretary Perdue imposed a 
minimum $15/acre payment on the first tranche of MFP 2.0. However, 
that's little consolation to a cotton or soybean producer receiving 
$15/acre given that those commodities were more severely impacted by 
retaliation.
Impact of MFP on Representative Farms
    AFPC currently maintains 63 representative crop farms across major 
production regions of the United States. This paper focuses on MFP for 
non-specialty crops in part because very little specialty crop 
production occurs on the representative farms. The representative farms 
have been used for over 30 years to provide feedback as to the likely 
consequences of policy changes on real farm operations across the 
United States. Locations, descriptions, and financial characteristics 
of the representative farms and dairies along with more information on 
the representative farm process can be found in AFPC Working Paper 19-
1. Representative farm nomenclature follows a standard format where the 
first two letters indicate the abbreviation for the state in which a 
farm is located, the next letter (or two letters) generally give(s) 
regional and/or farm-type descriptors, and the numbers in the name 
reflect the total acres of cropland on a given farm.
    To evaluate the farm-level impact of MFP on the financial condition 
of AFPC representative farms, two scenarios were analyzed:

   No MFP--this base scenario examines the financial outlook of 
        r the farms if no MFP was received by producers.

   MFP--assumes MFP 1.0 for crop farms paid on eligible 
        production in 2018 and on planted acres of eligible commodities 
        on the farm in 2019 for MFP 2.0 (at the respective county 
        rates). The third tranche of MFP 2.0 appears in the 2020 
        calendar year financial statements for the representative 
        farms.

    For the farm-level MFP analysis, a study period of 2018-2020 was 
utilized with the results focusing on projected ending cash reserves 
and the probabilities of farms having negative ending cash reserves at 
the end of 2020 (i.e., the probability of a having to refinance a 
carryover debt). Commodity prices and rates of change for input prices, 
interest rates, and land inflation rates published in the FAPRI 2019 
August Baseline Update for U.S. Agricultural Markets were utilized. 
Table 2 displays ending cash reserves and the probability of negative 
ending cash in 2020 for each representative farm under the No MFP and 
MFP alternatives. Changes in these numbers are also reported for each 
farm.

Table 2. Ending Cash Reserves and Probabilities of Negative Ending Cash for AFPC Representative Farms under Base
                                        (No MFP) and MFP Scenarios, 2020
----------------------------------------------------------------------------------------------------------------
                            2020 Ending Cash Reserves                2020 Probability of Negative Ending Cash
                ------------------------------------------------------------------------------------------------
                                                    Difference
                  No MFP  1,000    MFP  1,000         1,000          No MFP  %        MFP  %       Difference %
----------------------------------------------------------------------------------------------------------------
      IAG1350             ^768            ^641             127            100.0           100.0             0.0
      IAG3400             ^380            ^121             259             84.6            61.6           ^23.0
      NEG2400             ^139              39             178             64.4            47.0           ^17.4
      NEG4500           ^1,756          ^1,423             333             99.4            97.6            ^1.8
      NDG3000             ^183              19             202             78.8            48.4           ^30.4
      NDG9000              868           1,438             570             12.0             0.4           ^11.6
      ING1000              ^25              54              79             60.4            28.8           ^31.6
      ING3250              ^61             209             270             55.4            27.8           ^27.6
     MOCG2300               39             201             162             49.2            29.0           ^20.2
     MOCG4200              677             938             261             11.4             3.4            ^8.0
     MONG2300             ^322            ^155             166             91.0            76.4           ^14.6
             LANG2500     ^452            ^156             296             93.2            69.6           ^23.6
      TNG2500             ^362             ^82             281             90.2            63.4           ^26.8
      TNG5000              228             669             441             34.4             9.8           ^24.6
     NCSP2000           ^1,004            ^887             118             99.8            99.4            ^0.4
      NCC2030              407             517             109              0.0             0.0             0.0
      SCC2000              424             556             131              2.4             0.0            ^2.4
      SCG3500              837           1,029             192              1.6             0.0            ^1.6
     TXNP3450              212             443             231             31.0            11.2           ^19.8
    TXNP10880            1,820           2,614             794             10.4             3.0            ^7.4
     TXPG2500               43             175             132             42.0            27.0           ^15.0
     TXHG2700             ^232            ^115             117             85.6            72.0           ^13.6
     TXWG1600             ^171             ^97              74             85.8            74.6           ^11.2
      WAW2800              288             354              66              8.0             4.0            ^4.0
     WAW10000            1,039           1,272             233              8.4             5.6            ^2.8
     WAAW5500             ^318            ^253              65             96.0            92.2            ^3.8
      ORW4500              ^91             ^58              33             78.2            70.4            ^7.8
      MTW8000              989           1,047              58              0.0             0.0             0.0
     KSCW2000              173             266              93              5.8             0.6            ^5.2
     KSCW5300              482             778             296             13.2             2.8           ^10.4
     KSNW4000             ^124             ^24             100             72.8            52.6           ^20.2
     KSNW7000             ^109             107             217             59.6            41.6           ^18.0
      COW3000             ^106             ^85              21             92.4            89.0            ^3.4
      COW6000             ^851            ^788              64            100.0           100.0             0.0
     TXSP2500             ^216              53             270             87.2            36.2           ^51.0
     TXSP4500             ^411             114             526             81.2            37.2           ^44.0
     TXEC5000               21             659             638             48.4             8.6           ^39.8
     TXRP3000             ^464            ^333             131             99.2            98.0            ^1.2
     TXMC2500             ^190              92             282             68.2            40.2           ^28.0
     TXCB3750             ^738             ^78             661             96.6            58.4           ^38.2
    TXCB10000             ^236             889           1,126             59.6            18.0           ^41.6
     TXVC5500              725           1,412             688              8.4             0.0            ^8.4
     ARNC5000            1,300           1,843             543              5.2             2.4            ^2.8
      TNC3000              510             805             294              2.0             0.0            ^2.0
      TNC4050              122             630             509             38.8             6.0           ^32.8
            ALC3500        990           1,310             320              0.2             0.0            ^0.2
      GAC2500              773           1,019             246              1.2             0.0            ^1.2
     NCNP1600             ^733            ^556             177            100.0            99.2            ^0.8
      CAR1200              439             471              31              1.2             1.0            ^0.2
      CAR3000             ^477            ^371             107             62.0            55.6            ^6.4
     CABR1000              189             227              38             16.8            14.2            ^2.6
      CACR800             ^264            ^237              27             98.8            97.0            ^1.8
      TXR1500             ^226            ^194              32             91.4            89.6            ^1.8
      TXR3000              ^36              31              67             52.8            44.8            ^8.0
     TXBR1800               68             119              51             30.8            24.6            ^6.2
     TXER3200           ^1,010            ^821             190            100.0           100.0             0.0
             LASR2000      166             228              61             18.8            11.8            ^7.0
     ARMR6500             ^392             437             829             61.0            27.8           ^33.2
     ARSR3240              101             375             273             37.0            20.2           ^16.8
     ARWR2500             ^546            ^319             227             97.0            83.6           ^13.4
     ARHR4000             ^249               2             251             68.8            47.8           ^21.0
     MSDR5000               74             647             573             38.4            16.4           ^22.0
     MOBR4000             ^677            ^211             466             92.4            68.8           ^23.6
----------------------------------------------------------------------------------------------------------------

Figures 8-11 group the representative farms by farm type based on 
primary source of receipts. These figures provide a side-by-side 
comparison of the probabilities of negative ending cash under the two 
scenarios. AFPC has adopted a color-coded scoring method for financial 
measures based on probabilities of outcomes. As this report focuses on 
ending cash reserves, farms are classified as:

   Good--good liquidity position (green in charts) if 
        probability of negative ending cash in 2020 is less than 25 
        percent.

   Marginal--marginal liquidity position (yellow in charts) if 
        probability of negative ending cash in 2020 is between 25 and 
        50 percent.

   Poor--poor liquidity position (red in charts) if probability 
        of negative ending cash in 2020 is greater than 50 percent.

    The following is a description by farm classification of the 
financial impact of MFP on ending cash reserves and associated 
probabilities of refinancing. A summary of how many farms facing the 
most severe cashflow stress improve their ranking is also provided. A 
common theme across all of the farms is that--for the farms in counties 
with higher county payment rates--MFP was a significant help but in no 
case covered all impacts caused by the retaliatory tariffs.
Feedgrain and Oilseed Farms
    AFPC maintains 23 representative feedgrain and oilseed farms in ten 
states. The MFP scenario resulted in an average increase in ending cash 
reserves in 2020 of $240,000. Furthermore, the average likelihood of 
refinancing in 2020 dropped from 55.8% to 41.3% across all 23 farms as 
a result of MFP as compared to the Base (No MFP) scenario. Further 
examination of individual farms reveals that payments received under 
MFP resulted in four farms moving out of the most severe cashflow 
(liquidity) situation as described by AFPC (>50% probability of 
negative ending cash reserves in 2020). The No MFP scenario has 57% of 
the feedgrain and oilseed farms in poor liquidity position; only 39% of 
these farms are facing the most extreme cashflow position under the MFP 
scenario.
Wheat Farms
    AFPC currently works with 11 representative wheat farms in five 
different states. Despite the relatively low payment rate for wheat, a 
$113,000 average increase in ending cash reserves in 2020 resulted from 
payments received under MFP 1.0 and MFP 2.0. The average probability of 
negative ending cash across all farms in 2020 dropped from 48.6% to 
41.7%, a 6.9% improvement resulting from payments in MFP. The MFP 
scenario also resulted in a shift of one representative wheat farm out 
of the most serious threat of cashflow problems at the end of 2020.
Cotton Farms
    AFPC currently has 14 representative farms in six states with 
cotton as the primary commodity. On average, the representative cotton 
farms experienced a $458,000 increase in 2020 ending cash reserves 
under the MFP scenario as compared to the No MFP base scenario. The 
average likelihood of refinancing carryover debt in 2020 dropped from 
49.7% across all farms under the No MFP scenario to 28.9% when 
receiving MFP, a 20.9% decline. Similarly, payments received through 
MFP resulted in four farms improving their cashflow position 
significantly enough to no longer be considered in poor liquidity 
position at the end of 2020. The No MFP scenario had 50% of the 
representative cotton farms classified in poor liquidity position, 
while the MFP alternative resulted in only 21% of cotton farms in this 
unfavorable cashflow situation.
Figure 8.1. Probabilities of Negative Ending Cash for Select AFPC 
        Representative Feedgrain and Oilseed Farms under No MFP and MFP 
        Alternatives, 2020
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Figure 8.2. Probabilities of Negative Ending Cash for Select AFPC 
        Representative Feedgrain and Oilseed Farms under No MFP and MFP 
        Alternatives, 2020
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Figure 9. Probabilities of Negative Ending Cash for AFPC Representative 
        Wheat Farms under No MFP and MFP Alternatives, 2020
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Figure 10. Probabilities of Negative Ending Cash for AFPC 
        Representative Cotton Farms under No MFP and MFP Alternatives, 
        2020

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    Notably, two farms did not see marked improvements in their cash 
flow projections. TXRP3000 is in Jones County, TX, which had a 
relatively low MFP 2.0 payment rate of $46/ac, largely reflecting a 
significant presence of wheat production in the county. Similarly, 
NCNP1600 is in Edgecombe County, NC, which had a payment rate of $70/
ac, which was affected by the relatively large share of corn and peanut 
production in the county.
Rice Farms
    AFPC maintains 15 representative rice farms in six rice-producing 
states across the nation. Across all AFPC rice farms, an average 
increase of $215,000 in ending cash reserves in 2020 resulted from 
payments received under the MFP alternative. The average probability of 
farms having to refinance carryover debt dropped from 57.8% to 46.9% 
under the MFP alternative, an improvement of 10.9%. Three farms were 
able to significantly improve their liquidity position. Under the No 
MFP scenario, 60% of AFPC rice farms were in the worst AFPC cashflow 
classification; conversely, 40% were under the highest threat of 
experiencing cashflow problems under the MFP alternative.
Figure 11. Probabilities of Negative Ending Cash for AFPC 
        Representative Rice Farms under No MFP and MFP Alternatives, 
        2020
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
Impact of MFP on the Rural Economy
    Beyond examining the impact of MFP on the representative farms and 
examining equity within the program, we also examined the impact of MFP 
on the broader economy, recognizing that producers turn over income 
within the local economies in which they operate. Our analysis used 
IMPLAN 2018 data to examine the impacts of the 2018 and 2019 Market 
Facilitation Program payments (Tables 3 and 4). We analyzed the 
payments at the state level and combined the data for the national 
effect of the 2018 and 2019 MFP payments.
Figure 12. Percentage of AFPC Representative Farms in Good, Marginal, 
        and Poor Cashflow Position by Farm Type Under No MFP and MFP 
        Alternatives, 2020
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    The direct effect of the MFP payments includes the expenditures by 
the producers. The indirect and induced effect reflects the multiplied 
effect as businesses purchase along their supply chains, as well as the 
household expenditures of employees of both commodity-related 
businesses and all indirectly affected businesses. The total effect is 
a sum of the direct, indirect and induced effects. Output measures the 
overall economic activity and includes Value Added, which measures the 
return to local resources or the contributions to GDP, and Labor 
Income, which reflects the effects of wages and profits on the incomes 
of households in the state. Employment reflects the job count and does 
not distinguish between full-time and part-time workers.

                       Table 3. 2018 MFP Payments
                             (2018 Dollars)
------------------------------------------------------------------------
USA Employment      Labor          Income      Value-Added     Output
------------------------------------------------------------------------
   1  Direct          23,189   $1,791,629,28  $3,562,085,8  $8,503,082,5
                                          7             19            86
 2  Indirect          25,320   $1,196,428,95  $1,970,387,3  $4,118,940,6
                                          0             70            04
  3  Induced          16,381   $766,925,738   $1,376,242,7  $2,414,364,7
                                                        56            77
               ---------------------------------------------------------
  Total.......        64,889   $3,754,983,97  $6,908,715,9  $15,036,387,
                                          5             45           967
------------------------------------------------------------------------


                       Table 4. 2019 MFP Payments
                             (2019 Dollars)
------------------------------------------------------------------------
USA Employment      Labor          Income      Value-Added     Output
------------------------------------------------------------------------
   1  Direct          75,441   $2,878,518,92  $5,213,947,2  $14,192,829,
                                          4             33           490
 2  Indirect          48,545   $2,285,933,44  $3,682,596,6  $7,638,769,4
                                          1             09            37
  3  Induced          27,932   $1,333,912,70  $2,392,833,7  $4,195,747,3
                                          8             27            84
               ---------------------------------------------------------
  Total.......       151,918   $6,498,365,07  $11,289,377,  $26,027,346,
                                          3            569           310
------------------------------------------------------------------------

    For 2018, the initial MFP 1.0 payments of $8.6 billion led to a 
total economic output of $15 billion, with $6.9 billion contributing to 
the national GDP and $3.75 billion in labor income. For 2019, the 
initial MFP 2.0 payments of $14.2 billion led to a total economic 
output of $26 billion, with $11.3 billion contributing to the national 
GDP and $6.5 billion in labor income. In total, MFP has had a $41 
billion impact on the rural economy over the past 2 years.
Conclusion
    On January 15, 2020, the U.S. and China signed a Phase One 
agreement that aims to increase exports from the U.S. to China to $80 
billion over the next 2 years, and the deal entered into force on 
February 14, 2020. Initial market response to the Phase One deal has 
been tepid, and the spread of the coronavirus is dampening the Chinese 
economy. While no aid has been provided for 2020, President Trump 
recently tweeted that ``until such time as the trade deals with China, 
Mexico, Canada, and others fully kick in, that aid will be provided by 
the Federal Government.''
    In the meantime, 2 consecutive years of trade aid have been 
incredibly important to the economic viability of farms, in some cases 
preventing more farmers from having to sell and leave the business.
References
    FAPRI. ``2019 August Baseline Update for U.S. Agricultural Markets: 
FAPRI-MU Report #03-19.'' August 28, 2019. Available online at https://
www.fapri.missouri.edu/wp-content/uploads/2019/08/2019-August-
Update.pdf.
    Outlaw, Joe L., George M. Knapek, J. Marc Raulston, Henry L. 
Bryant, Brian K. Herbst, David P. Anderson, Steven L. Klose, and Peter 
Zimmel. ``Representative Farms Economic Outlook for the January 2019 
FAPRI/AFPC Baseline.'' Texas A&M AgriLife Research, Texas A&M AgriLife 
Extension Service, Texas A&M University, Department of Agricultural 
Economics, AFPC Working Paper 19-1. April 2019.
    U.S. Department of Agriculture. 2018a. ``USDA Announces Details of 
Assistance for Farmers Impacted by Unjustified Retaliation,'' press 
release August 27, 2018. Available online at https://www.usda.gov/
media/pressreleases/2018/08/27/usda-announces-details-assistance-
farmers-impacted-unjustified [accessed March 1, 2020].
    U.S. Department of Agriculture. 2018b. ``Trade Damage Estimation 
for the Market Facilitation Program and Food Purchase and Distribution 
Program,'' September 13, 2018.
    U.S. Department of Agriculture, Office of the Chief Economist. 
2019. ``Trade Damage Estimation for the 2019 Market Facilitation 
Program and Food Purchases and Distribution Program,'' August 22, 2019.

          Mention of a trademark or a proprietary product does not 
        constitute a guarantee or a warranty of the product by Texas 
        AgriLife Research or Texas AgriLife Extension Service and does 
        not imply its approval to the exclusion of other products that 
        also may be suitable.
          All programs and information of Texas A&M AgriLife Research 
        or Texas A&M AgriLife Extension Service are available to 
        everyone without regard to race, color, religion, sex, age, 
        handicap, or national origin.
                                 ______
                                 
Supplementary Material Submitted by Hon. Angie Craig, a Representative 
                       in Congress from Minnesota
[https://www.propelnonprofits.org/studies/main-street-project/]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Case Study (https://www.propelnonprofits.org/studies/)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Lending (https://www.propelnonprofits.org/service-types/lending/)
    Main Street Project

    Main Street Project is a Northfield, Minnesota-based nonprofit, 
working to change the conventional food system by deploying an 
alternative, small-scale system that is accessible and economically 
viable. Main Street has three primary areas of focus: to build a new 
model for regenerative agriculture, to train the next generation of 
farmers, and to develop a regional food system that delivers on the 
triple bottom line of social, economic and ecological benefits.
    The organization was founded in 2005 by Niel Ritchie, a veteran 
nonprofit leader with over 25 years of rural policy and organizing 
experience. Main Street Project's current work on agriculture systems 
grew out of a Northwest Area Foundation funded collaboration on an 
ambitious four-state, multi-year community-building initiative called 
Raices (roots)--organizing primarily with Latino youth and adults in 
diverse rural communities.
    In 2007, Niel was joined by Reginaldo (Regi) Haslett-Marroquin, a 
colleague at the Institute for Agriculture and Trade Policy who helped 
found the U.S. Fair Trade Federation, and launched Peace Coffee as a 
social enterprise and model of fair trade with coffee growers. You can 
read more about their history and accomplishments here (http://
mainstreetproject.org/who-we-are/board-staff/).
    Using insights they gleaned during the Raices Project--among other 
professional and personal experiences--Main Street Project launched a 
pilot program to begin to address questions around food security and 
agricultural opportunities that might better serve the Latino 
population. Their focus was on poultry farming (for a number of reasons 
(http://mainstreetproject.org/blog/)), and in 2013, Main Street 
Project's Board and leadership decided to focus entirely on developing 
the poultry-centered regenerative agriculture model.
    The complexity of the model and need for infrastructure investment 
required more sophisticated management and capacity than the team had 
in-house. They had cash flow challenges, and needed help to stay 
afloat. ``I had to be convinced that talking to a lender was not an 
admission of failure--but rather, it was an opportunity,'' Niel 
admitted. ``I got up the courage--and sure enough, I found out that was 
true.''
    Niel reached out to Propel Nonprofits (formerly Nonprofits 
Assistance Fund), and began working with Portfolio Manager Allison 
Wagstrom. ``Allison was able to understand our situation, demonstrate 
that the challenges were solvable, and take a chance on us so that we 
could get our feet under us and move to the next level,'' he said. The 
line of credit Propel Nonprofits provided helped Main Street even out 
their operations while they continued to expand. As Niel said, Propel 
Nonprofits ``took the stress out of the equation.''
    ``They're social entrepreneurs who are trying to make farming a 
livable employment in a way that's respectful to the environment and to 
the workers,'' Allison said. ``The work they do is amazing.''
    In addition to the line of credit, Allison and the Main Street team 
began meeting regularly to flesh out the organization's 10 year balance 
sheet projection and business plan. ``Allison and the Propel 
Nonprofits' team continue to be enormously helpful,'' Niel said, 
``giving us feedback and advice about planning. They've become 
partners, coaching and mentoring us so that we can navigate the 
complexities of lending, program-related investments, and other 
strategies we're going to need to employ to get our work done.''
    As Main Street's leadership considers what the future holds, a 
resounding theme is the need for--quite simply--more space. They've 
simply run out of operating room, and the model demands testing the 
system at a farm-scale level. ``When we bring it all together,'' Niel 
explained, ``we'll get more efficiencies and be able to better 
demonstrate the impact of our system. We're tying economic and 
ecological success to this model--and we need to do it at scale.'' Main 
Street is in the midst of a plan to acquire new land, which will allow 
them to significantly scale up their training program to reach the 
aforementioned goals.
    Propel Nonprofits is honored to partner with Main Street in this 
important work, and Allison and the team look forward to continued 
synergies as they grow. ``Propel Nonprofits is one of the strongest 
partners and most important assets the nonprofit community has here,'' 
Niel reflects. ``They are a partner for us now, and will continue to be 
the agency that helps us navigate the complexities of growing and 
sustaining our work.''
    To learn more about the Main Street Project, visit them online 
(http://mainstreetproject.org/).
                                 ______
                                 
Submitted Letter by Hon. Kim Schrier, a Representative in Congress from 
                               Washington
January 31, 2020

  Hon. Kim Schrier,
  United States House of Representatives,
  Washington D.C.

    Dear Congresswoman Schrier:

    Thank you for being a strong voice for Washington State's natural 
resources and agriculture in Congress. In particular, I'd like to thank 
you for your comments and questions posed to the leadership of the Farm 
Services Administration (FSA) at the recent hearing of the Subcommittee 
on Conservation and Forestry, and for sharing the letter of support 
from the Washington State Conservation Commission (SCC) and Washington 
State Department of Fish and Wildlife for the State Acres for Wildlife 
Enhancement (SAFE) program. We appreciate your leadership, and we also 
appreciate this opportunity to share our concerns about two vital 
programs for Washington State--the Conservation Reserve Program (CRP) 
and Conservation Reserve Enhancement Program (CREP).
    The following examples demonstrate what makes CREP and CRP so 
important for Washington. I've included a list of our concerns with the 
implementation of these programs in an attachment to this letter.
Importance of CREP
    CREP is the largest riparian restoration program in our state. The 
program goal is to enhance salmon habitat in areas where farmland and 
salmon streams intersect. In the 20 years since its inception, farmers 
have voluntarily enhanced over 925 miles of stream for salmon--for 
perspective, that's the distance from Seattle to Fresno. They've 
planted nearly six million trees. In addition to shading streams, 
filtering pollutants, and providing habitat, these trees also sequester 
carbon. Conditions have improved in stream reaches with high levels of 
participation in CREP. For example, in the Tucannon River in southeast 
Washington, water temperatures cooled by 
10 F and Chinook salmon runs increased after several landowners along 
the river participated in CREP. The results CREP can deliver aren't 
just good news for salmon; it's good for area recovery. Nearly all CREP 
projects are within priority Chinook stock basins for our Southern 
Resident Killer Whales.
Importance of CRP
    After hearing your comments during the Conservation and Forestry 
Subcommittee hearing, I know you understand the importance of CRP in 
Washington, especially as it relates to sage-grouse. CRP also has been 
important for producers in the Palouse. Whitman County has some of the 
highest CRP acreage in the state. Local producers rely on CRP as an 
alternative to farming highly erodible soil, which can choke rivers 
with sediment. Unfortunately, several CRP contracts in the County are 
about to expire at the same time that Palouse Conservation District and 
several other partners and landowners are making progress improving 
water quality through an extremely successful Regional Conservation 
Partnership Program (RCPP) project in the Palouse Watershed. These RCPP 
partners have prevented enough sediment from entering the watershed to 
fill dump trucks lined back-to-back from the Olympia Capitol to the 
Space Needle. This progress could be negatively impacted as several 
sensitive CRP sites are at-risk of being put back into production, not 
because farmers want to, but because they feel they have no other 
choice. Restrictions on CRP open enrollment and cutoffs have prevented 
many farmers from re-enrolling. This is detrimental to the water 
quality goals that so many partners in the area are trying to achieve.
    I hope this glimpse into some of Washington's CREP and CRP 
accomplishments illustrates why we're so concerned about issues that 
threaten the future of these programs. I've outlined our concerns In 
the attached document along with our recommended solutions to ensure 
these programs deliver natural resource results and engage farmers as 
partners in conservation. Farmer engagement is key. With the number of 
places in Washington where ecological and agricultural assets 
intersect, we cannot expect to make progress on urgent conservation 
issues without the willing partnership of our farmers.
    Again, thank you for your leadership on these issues. I look 
forward to having the opportunity to discuss them with you in greater 
depth. I will be in Washington, D.C. the week of March 23. Hopefully we 
can meet at that time.
    If you have other questions on these topics, please contact me at 
[Redacted] or [Redacted].
            Sincerely,
            
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Carol Smith,
Executive Director,
Washington State Conservation Commission.
                               attachment
SCC Concerns and Recommendations for CREP/CRP in Washington State
(1) Rental Rates
   Background: When farmers voluntarily sign up to replace some 
        of their cropland with native vegetation, they're paid rent for 
        the acreage they plant. Without this, the decision to take land 
        out of production is a prohibitive financial risk.

   Concern: CRP/CREP rental rates have been reduced in many 
        areas of Washington State. Prior to 2018, the FSA calculated 
        rental rates by multiplying the county rate by a soil 
        productivity factor that ranged from .5 (least productive) to 
        1.5 (most productive). In 2018, the top two soil productivity 
        factors (1.25 and 1.5) were eliminated. For many farmers, that 
        means that CRP/CREP rental rates are far below the true crop 
        value of their property.

   Recommendation: Restore the productivity factors of 1.25 and 
        1.5 into the soil rental rate calculation for CREP. This would 
        be done at the Secretary and Under Secretary level of USDA, and 
        the Deputy Administrator of FSA's Farm Programs.
(2) Incentive Payments
   Background: There are two incentive payments in CREP and 
        CRP, (1) the Practice Incentive Payment (PIP), and (2) the 
        Signing Incentive Payment (SIP). Currently farmers rely on PIP 
        to cover 40 percent of practice installation costs. They also 
        have relied on SIP to pay $100/acre to help offset the cost of 
        converting cropland to habitat.

   Concern: In the future, PIP likely will drop to just five 
        percent of practice costs for both programs, imposing a heavy 
        financial burden on farmers to pay the difference. For CRP, SIP 
        will drop significantly in many areas of Washington. For 
        example, in eastern Washington, the SIP will drop from $100/
        acre to just $16.50/acre.

   Recommendation: We're asking Congress to pursue 
        appropriation amendments to restore the PIP to 40 percent and 
        the SIP to $100/acre. We also request that language in the next 
        farm bill reflect these incentive levels.
(3) Mid-Contract Management
   Background: Farmers rely on FSA to pay 50 percent of the 
        costs of maintenance activities on CREP projects mid-way 
        through the contract period. This may include things like 
        removing invasive weeds and replanting trees.

   Concern: FSA no longer pays for Mid-Contract Management. 
        Without this, plantings have a higher risk of failure, which 
        reflects poorly on the program and prevents us from achieving 
        goals.

   Recommendation: We're asking Congress to restore funding of 
        Mid-Contract Management through appropriations and in the 
        language of the next farm bill.
(4) Acreage Caps
   Background: There are caps set at the Federal level for how 
        many acres can be enrolled in CRP. This includes acres enrolled 
        in CREP.

   Concern: Some counties in Washington have reached or 
        exceeded their acreage caps. This is preventing farmers from 
        voluntarily participating in efforts that would benefit 
        threatened species, such as ESA-listed salmon species, sage and 
        sharp-tailed grouse, the pygmy rabbit, and the Washington 
        ground squirrel.

   Recommendation: We're asking Congress to ensure that the 
        next farm bill include an administrative process for approval 
        of waivers that provides a pathway for Washington State to 
        enroll CRP acreage above the cap.
                                 ______
                                 
Supplementary Material Submitted by Hon. Sonny Perdue, Secretary, U.S. 
                       Department of Agriculture
Insert 1
          Mr. Conaway. This report determines that a significantly 
        higher number of farms would be in poor financial condition and 
        less likely to cash-flow without the assistance provided by the 
        Administration. The report also found there is no regional bias 
        built in to how county payment rates were calculated, and 
        observes that 70 percent of the aid went to midwestern states. 
        Given the competing narrative that MFP is allegedly biased 
        toward southern producers, Mr. Secretary, would you explain to 
        us the methodology about how the USDA determined those county 
        payment rates for the second round?
          Secretary Perdue. I will do my best, Congressman. First of 
        all, my instructions to our economists were kind of Sergeant 
        Webb, just the facts, sir. In this area there was no 
        predetermined regional demographic or sector bias in any of 
        this.
          In fact, I would like to show you, you mentioned something. I 
        have a chart here for your Committee that shows you the states 
        that here that have--we will provide an electronic copy of all 
        of that, but the darker states are where the highest payments 
        were . . . .

    Given the timing of the 2019 MFP during the crop year, USDA 
developed a single rate per acre in each county for MFP-eligible non-
specialty crops, which include select non-specialty commodities both 
directly and indirectly affected by the trade dispute, in order to 
minimize potential distortions. The specific commodity rates that 
formed the basis of the country rate were derived from the gross trade 
damage estimates. Commodity rates were calculated by dividing the gross 
trade damage by the average volume of production in 2015-17 as reported 
by NASS. The county payment rates were based on historical fixed 
average area and fixed average yields for all eligible crops.
    More details on these calculations may be found in the 2019 USDA 
Trade Methodology report: https://www.usda.gov/sites/default/files/
documents/USDA_Trade_
Methodology_Report_2019.pdf. [See Attachment 1].
Insert 2
          Mr. Costa. Also, the efforts on the payments with Farm 
        Service Agency continue to be problematic, it seems. We have 
        people that have applied in 2019, and in some cases, 2018. We 
        have continued to ask you folks and then locally with the FSA 
        offices why they haven't processed in a more timely manner. Are 
        we looking at bringing more personnel to expedite that?
          Secretary Perdue. We are always trying to hire, but I would 
        love to know specifically if people have not gotten those kinds 
        of payments in that kind of period of time.
          Mr. Costa. I would be happy to provide you a list.
          Secretary Perdue. Surely. Absolutely, and we will look into 
        that.

    Note: FPAC awaits list from Mr. Costa. At this time, FSA has not 
seen the list referenced.
Insert 3
          Ms. Craig. . . .
          I would like to now shift to beginning farmers. For more than 
        a decade, the Main Street Project outside of Northfield, 
        Minnesota, where I represent, has trained rural Latino 
        immigrants on regenerative ag practices in poultry as a means 
        out of poverty. This is Janet. She is just one of the beginning 
        farmers who has taken part in training through the Main Street 
        Project. In August, the project was informed that they had been 
        awarded a U.S. NIFA Beginning Farmer and Rancher Grant. Those 
        grant funds were publicly announced in October, but as of 
        today, the organization still does not have the funds they were 
        promised by USDA. You said the move of ERS, NIFA to Kansas City 
        was to better serve farmers and ranchers where they are, but 
        that just hasn't proven to be the case for farmers like Janet.
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    USDA/NIFA appreciates the Committee's recognition of the importance 
of the Beginning Farmer and Rancher Development Program (BFRDP), 
funding a total of 32 projects in FY 2019, for beginning farmers like 
Janet, and the Main Street Project outside of Northfield, Minnesota. 
Funds were released to the grantee on 2 April 2020. As of 11 September 
2020, the grantee has made use of approximately 76% of the funding 
originally awarded.
    USDA/NIFA remains committed to ensuring there will be a ``new 
generation'' of beginning farmers and ranchers. Approximately 400 
projects have been funded since the inception of the BFRDP in 2009, 
providing almost $200 million in grants to organizations for education, 
mentoring, and technical assistance initiatives for beginning farmers 
or ranchers. In FY 2020, all grants for BFRDP program have been awarded 
and funds have been made available to the grantees.
Insert 4
          Mrs. Hayes. . . .
          
    I looked, and you mentioned several of your Department's proposals 
to gut SNAP benefits in your written testimony that was submitted to 
the Committee, yet there is no mention that the President's budget 
request for Fiscal Year 2021 revived your previous proposal to take 
away benefits from households and replace them with what you are 
calling Harvest Boxes of pre-selected nonperishable food items.
          * * * * *
          Mrs. Hayes. No, I don't know, that is why I am asking you; 
        can you explain how this program would be implemented, or just 
        if you thought about how that would take place?
          Secretary Perdue. We have thought about that, and I would 
        love to have an extended conversation with you about that. I am 
        not sure this is the way to do that, but this is the place to 
        do that. But, there was a lot of study put into that about the 
        home delivery there, giving people a choice, maybe an app on 
        their phone of the groceries they wanted delivered there, and 
        using commercial distributions. We are working with both Amazon 
        and Wal-Mart and others who expressed great interest in 
        utilizing these services.
          Mrs. Hayes. Is this information anywhere where I can access 
        it, because I spent a lot of time trying to look up the details 
        of it and I can't find it.
          Secretary Perdue. I would be happy to have our FNS people 
        deliver to you what we discovered, yes.

    Under the Harvest Box proposal, SNAP participants would receive 
domestically sourced and produced food, known as USDA Foods, in lieu of 
a portion of their SNAP benefits. USDA would utilize a model similar to 
that currently used to distribute USDA Foods to other nutrition 
assistance programs to provide shelf-stable staple foods to SNAP 
households at approximately half the retail cost, resulting in 
significant savings to taxpayers with no loss in food for recipients. 
This model would also ensure that recipients receive this portion of 
their benefit as healthy, nutritious foods for home consumption. States 
would maintain the ability to provide choice to their recipients, 
including innovative approaches for the inclusion of fresh products.
Insert 5
          Mrs. Hartzler. . . .
          In the 2018 Farm Bill, I passed the Community Facilities 
        Lending Provision to increase the threshold for the community 
        facilities and the water waste programs to population of 50,000 
        people to allow more of our small communities to be able to 
        access these funds. Can you tell me if the Department has yet 
        made any loan guarantees to the newly eligible communities 
        under this program?
          Secretary Perdue. I cannot tell you definitively. I believe 
        that we have. We were anxiously awaiting that expansion there. 
        We had a lot of demand----
          Mrs. Hartzler. Right.
          Secretary Perdue.--in communities that exceeded the 10 and 
        $20,000, 20 person population limit, and I would assume that we 
        have. I can't definitively tell you that, but we can get you 
        the number of people and the populations that we served.
          Mrs. Hartzler. That would be great, and if you could also get 
        me more information about when they can apply, those new 
        communities. That is exciting. That would be great.

    Effective October 1, 2020, the 50,000 population limit will be 
administered under the OneRD Guaranteed Rule. This Rule implements a 
standard set of requirements, processes, and forms for four Rural 
Development guarantee loan programs including Community Facilities, 
Water and Waste Disposal, Business and Industry, and Rural Energy for 
America.
    As of September 10, 2020, the Community Facilities Guaranteed Loan 
Program had yet to receive an application for projects located in 
communities exceeding the previous population limit of 20,000. However, 
our Community Facilities program has had several inquiries from 
commercial lenders and constituents expressing a strong interest in the 
Guaranteed Loan Program for populations exceeding 20,000 and we 
anticipate an increase in applications during FY 2021.
Insert 6
          Mr. Cox. All right, and so I guess just in a general sense, 
        USDA, we want more employees? We would like to grow that 
        workforce?
          Secretary Perdue. We want enough people to get the job done. 
        I don't want more or less. I want enough people to get the job 
        done. That is what our----
          Mr. Cox. And right now we don't have enough though?
          Secretary Perdue. We are not having enough in some places. We 
        have an optimum office production that tells where the workload 
        is, and who needs to be there.
          Mr. Cox. And do we have metrics from that optimum office yet 
        to detail how well that is working?
          Secretary Perdue. We do.
          Mr. Cox. That would be great to see. Thanks so much.

    Optimally Productive Office (OPO) is a suite of tools allowing FSA 
to make informed, data-driven staffing decisions and identifies offices 
to target for staffing placements. FSA began using this tool to make 
informed hiring decisions in FY 2018.
    While the Productivity dashboards are primarily centered around 
staffing offices for expected core workload, the tool also informs FSA 
leaders on workload surrounding ad hoc and disaster programs by 
generating benchmarks around metric production for these programs. 
Those benchmarks can then be applied to projected workload around 
upcoming programs and streamlining processes and systems.
    As of March 2020, FSA leaders, using the OPO tool, identified 268 
Farm Program Offices and 151 Farm Loan Program Offices to target for 
hiring in FY 2020. As of the end of September 2020, our successful FY 
2020 hiring efforts have resulted in 190 Farm Program offices and 130 
FLP offices still requiring additional staff.
Insert 7
          Ms. Adams. I would like to ask a couple of questions about 
        the impacts of the ERS and NIFA relocation, and the impact that 
        it is having on 1890 land-grant universities. All 19 schools 
        turned in their applications last November for the 1890 
        scholarships, which received $40 million in mandatory funding 
        in the 2018 Farm Bill, but it has been 3 months. They still 
        haven't received the funding. They are concerned that the money 
        which is somewhere in the neighborhood of $750,000 per school 
        may not be available until late this spring for students 
        entering school in the fall.
          Having been a professor for 40 years, I know that schools 
        need to be able to notify students earlier than late spring 
        about their scholarships so that their recruiting can make an 
        informed decision.
          Given that about 68 percent of NIFA's positions are vacant, 
        what is USDA doing to ensure this delayed funding doesn't 
        prevent students from studying agriculture at one of our 1890s?
          Secretary Perdue. First of all, Ms. Adams, I am very 
        disappointed to hear that report because it conflicts with what 
        my people at NIFA have told me regarding that, particularly 
        with the HBCUs regarding the student scholarships there. As I 
        indicated in my earlier comments, it is my understanding that 
        these are being disseminated, and I will specifically find out. 
        If your facts are accurate, then I am extremely disappointed in 
        the information I am being given about that. Our commitment in 
        this move was that the services would not be inhibited, and 
        that is my expectation in that way. We allowed some extensions 
        in order to make sure that services were continued.
          Ms. Adams. Okay, great. Well, I hope you do look into that. 
        That is the information that I have. You do have a timeline 
        already for dispersing the funding?
          Secretary Perdue. Yes, ma'am. We actually prioritize those 
        HBCU scholarships, because they were new and we know that the 
        students were looking forward to them. As I said, I will check 
        on that and if your facts are accurate, then I am very 
        disappointed in the information I have been given.
          Ms. Adams. Okay. If you would get back to me, I would 
        appreciate it.

    The peer-review panels completed their reviews in January 2020. In 
February 2020, all the 1890 land-grant universities were notified of 
grant award recommendations and that pre-award costs can be incurred up 
to 90 days before the start date of the award. The awards were 
officially announced by the agency on 23 April 2020. NIFA has been in 
contact with the administration of the 1890s, providing the required 
guidance and orientation for successful program implementation.
    During relocation, NIFA retained essential staff in Washington, 
D.C., associated with the 1890 programs, to assist with the 
implementation of the 1890 Scholarships Program and to help train the 
new staff that the agency was recruiting in Kansas City, MO.
    In October 2020, NIFA will begin requesting progress reports from 
the 1890 land-grant universities and processing continuation awards 
using the mandatory funding for the program in FY 2021. NIFA expects 
the 1890s to receive notification regarding FY 2021 funding in Spring 
of 2021.
Insert 8
          Ms. Adams. Okay. Well, I strongly supported the inclusion of 
        the Office of Urban Agriculture and Innovative Production in 
        the farm bill, pushed for the funding. One of the provisions in 
        the bill provided $10 million in mandatory money through the 
        Commodity Credit Corporation. I would expect that with funding 
        already available for use, that those grants would be 
        implemented expeditiously, so I am glad that you are going to 
        look into it.
          Do you have any updates on the implementation of the 
        competitive grants, and of the office itself?
          Secretary Perdue. Yes, ma'am. I can't give you the definitive 
        definition. I remember our staff mentioning that to me about 
        where we were on it, but I would rather, since I can't be sure 
        about it, I would rather tell you in a response in a QFR over 
        where we are on those competitive grants.

    To institutionalize support for urban farming, the 2018 Farm Bill 
directed USDA to stand up a new Office of Urban Agriculture and 
Innovative Production. It is led by NRCS and works in partnership with 
numerous USDA agencies that support urban agriculture.
    The office is in the process of setting up a Federal Advisory 
Committee for the Secretary of Agriculture, as well as 10 new Urban and 
Suburban FSA County Committees. It recently provided grants and 
cooperative agreements through a competitive process.
    On August 12, the Farm Service Agency announced the first five 
Urban and Suburban FSA County Committee locations and requested 
nominees as part of the election process. The first five are located 
in: Richmond, VA; Philadelphia, PA; Cleveland, OH; Portland, OR; and 
Albuquerque, NM. The remaining five locations will be announced later 
this fall.
    The new committees will be fully stood-up in Fiscal Year 2021. 
Members will be local urban/suburban farmers who will help ensure fair 
and equitable administration of FSA farm programs in their county or 
multi-county jurisdiction.
    FSA began accepting nominations for urban county committee members 
on September 8. Urban farmers who participate or cooperate in an FSA 
program in the county selected may either be nominated or nominate 
themselves or others as a candidate. Organizations also may nominate 
candidates. All nomination forms must be postmarked or received in the 
local FSA office by October 2. Election ballots will be mailed to 
eligible voters beginning October 23.
    On August 25, the office announced the first-ever recipients of 
Urban Agriculture and Innovative Production Competitive Grants and 
Cooperative Agreements for Community Compost and Food Waste Reduction. 
These grants and projects were highly competitive. We received 
approximately 600 applications across both categories.

    Title: Grants for Urban Agriculture and Innovative Production 
(Planning Projects)

    Announced Availability: $1 million
    Date of Announcement: 5/6/2020
    Application Close Date: 7/6/2020
    Ceiling: $500,000
    Floor: $100,000
    Cost-Share: None
    Grant Announcement Date: 8/25/2020
    Amount Awarded: Approximately $1.14 million
    Number of Awards: 3

    Title: Grants for Urban Agriculture and Innovative Production 
(Implementation Projects)

    Announced Availability: $2 million
    Date of Announcement: 5/6/2020
    Application Close Date: 7/6/2020
    Ceiling: $500,000
    Floor: $100,000
    Cost-Share: None
    Grant Announcement Date: 8/25/2020
    Amount Awarded: Approximately $1.88 million
    Number of Awards: 7

    Title: Cooperative Agreements for Community Compost and Food Waste 
Reduction

    Announced Availability: $900,000
    Date of Announcement: 5/11/2020
    Application Close Date: 6/26/2020
    Ceiling: $90,000
    Floor: $45,000
    Cost-Share: 25% non-Federal
    Grant Announcement Date: 8/25/2020
    Amount Awarded: Approximately $1.09
    Number of Awards:13
Insert 9
          Mr. Carbajal. Thank you, and looping back to my initial 
        question on SNAP, is California listed on the waiver list that 
        you mentioned earlier?
          Secretary Perdue. Let me see, there are several waivers in 
        California. Yes, sir, there are 17 labor market areas waived in 
        California.
          Mr. Carbajal. Are any of those San Luis Obispo and Santa 
        Barbara County?
          Secretary Perdue. I think so.
          Mr. Carbajal. Is that a think so or a yes?
          Secretary Perdue. I can't say for sure. I believe that you 
        are listed on part of the area. I don't know what those 17 
        areas are specifically, but we have 17 labor market areas in 
        California that waivers are issued.
          Mr. Carbajal. Great. If we could loop back later on, can I 
        get that? That would be great.
          Secretary Perdue. We will get that for you.

    On February 28, 2020, the Food and Nutrition Service (FNS) approved 
California's request to waive the time limit for able-bodied adults 
without dependents (ABAWDs) in 17 Labor Market Areas (LMAs), not 
including San Luis Obispo or Santa Barbara County. This request was 
approved under the waiver standards set to begin April 1, 2020, under 
the final rule, Supplemental Nutrition Assistance Program: Requirements 
for Able-Bodied Adults Without Dependents (84 FR 66782) published 
December 5, 2019.
    On March 13, 2020, the United States District Court for the 
District of Columbia issued a stay pending judicial review of the 
December 5, 2019, final rule's provisions related to waivers. This 
preliminary injunction prevented California's waiver (the one approved 
on February 28, 2020) from taking effect. Therefore, California 
reverted to operating under the waiver in place since September 1, 
2019, which relied on the waiver criteria used before the December 5, 
2019, rule was published. This waiver included both San Luis Obispo 
County and Santa Barbara County and expired August 31, 2020.
    Next, FNS approved California's request for a statewide waiver of 
the time limit, effective July 1, 2020. The approval replaced the 
approval effective since September 1, 2019. This approval was also 
based on the previous waiver authority (published in the January 17, 
2001, final rule, Food Stamp Program: Personal Responsibility 
Provisions of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (66 FR 4438) because it was approved while 
the preliminary injunction was in effect. This statewide waiver remains 
in place.
    Please note, on October 18, 2020, the United States District Court 
for the District of Columbia vacated the final rule. This did not 
impact the waiver currently in place in California since that waiver 
was already approved under the 2001 standards and not the standards of 
the vacated rule.
                                 ______
                                 
                          Submitted Questions
Response from Hon. Sonny Perdue, Secretary, U.S. Department of 
        Agriculture
Questions Submitted by Hon. Collin C. Peterson, a Representative in 
        Congress from Minnesota
    Question 1. There are several ag commodities, like wool and 
sheepskins, that have been hit hard by retaliatory tariffs but were not 
part of the USDA's Market Facilitation Program. Since the 
implementation of these tariffs, we've seen an 85% drop in wool exports 
by value and an even worse picture for sheepskin exports. As we head 
into this year's shearing season, wool warehouses across the country 
already sitting on 1 year's production and will soon have two marketing 
seasons of backlog. Tools like the Wool Loan Deficiency Program aren't 
working, without wool sales there is nothing to report. What is USDA 
doing to help bridge this gap and protect sheep producers from market 
conditions like we're currently seeing?
    Answer. Marketing Assistance Loans (MALs) are available for shorn 
wool and Loan Deficiency Payments (LDPs) are available for both shorn 
wool and wool pelts, and neither program requires the commodity to be 
sold in order to participate in the programs. In the crop year of 2020, 
there were over $2 million in LDP payments made to wool producers 
across 36 States. This represents the highest levels of LDP payments 
since 2011 and a substantial increase relative to last year's payments 
of $6,159.88.
    U.S wool producers also expressed an interest in adding wool as an 
eligible commodity to the Farm Storage Facility Loan (FSFL) program as 
a means of low-cost financing for producers to store, handle, and 
transport wool. The addition of wool as an eligible commodity for the 
FSFL program has been approved and will benefit wool producers 
nationwide.

    Question 2. African Swine Fever continues to be a major concern for 
the domestic pork industry. Most industry leaders estimate that China 
has lost at least half of their hogs, though that number could be much 
higher.
    How is USDA coordinating with counterparts in Asia and Europe to 
better prevent and respond to this disease?
    Answer. The United States is a member of the World Organization for 
Animal Health (OIE), a global body dedicated to improving animal health 
worldwide through communication, collaboration, and setting standards 
for the international trade in animals and animal products among its 
182 member states. In concert with OIE, the U.S. participates in 
international forums focused on animal diseases, and African Swine 
Fever (ASF) in particular, to discuss strategies to limit their spread.
    USDA's Animal and Plant Health Inspection Service (APHIS) officials 
work with foreign governments directly to learn more about the spread 
of agricultural diseases and effective methods to reduce their 
transmission. The Agency has assisted foreign governments in 
controlling these diseases within their own boundaries, which reduces 
the threat of introduction to the U.S. As one example, APHIS is 
coordinating activities with Vietnamese animal health officials to 
improve their response activities to domestic ASF outbreaks. This year 
the Agency, in collaboration with the National Pork Board, the 
University of Maine Cooperative Extension, the Virginia Department of 
Environmental Quality, and the Swine Health Information Center, began a 
project in Vietnam to track ASF virus survival in carcasses undergoing 
composting and study ASF virus survival in swine slurry under field 
conditions. APHIS has also spent considerable time negotiating with 
Japan about mutual acceptance of zoning for various swine diseases.
    The U.S. also works closely with the European Union and its Member 
States to track the prevalence of ASF and to assess the continent's 
capacity to limit its spread. APHIS regularly monitors the E.U.'s ASF 
zones and their level of restrictions. In a 2019 project, U.S. 
officials reviewed the swine health status of 13 E.U. Member States 
that were deemed to be representative of the trade union. APHIS 
concluded that the Member States have sufficient animal health programs 
that allows them to quickly detect ASF in wild boar and domestic swine 
populations, enabling a swift emergency response, as we saw recently in 
Germany. We also determined that they have traceability systems capable 
of differentiating the origin of live swine from ASF affected areas, 
which allows them to ensure that animals and products from ASF affected 
areas are not exported to the U.S., which further protects U.S. animal 
health.
    USDA and the Department of Homeland Security's Science and 
Technology Directorate are collaborating on vaccine research and 
enhancing diagnostic technologies for ASF. In addition, USDA's 
Agricultural Research Service and APHIS formed a task force at the Plum 
Island Animal Disease Center to improve diagnostics and vaccines, so 
that pork producers can better protect their animals in the future. 
APHIS is also developing additional strategies to enhance diagnostic 
capabilities and enhance testing efficiencies.
    APHIS has also increased the number of National Animal Health 
Laboratory Network laboratories approved for ASF testing to 47, more 
than quadrupling U.S. laboratory capacity for this disease. In 
addition, by approving the pooling of samples, we have increased 
testing capacity for ASF to 200,000 animals in 24 hours.

    Question 2a. How is USDA working with the Department of Homeland 
Security and other government agencies to prevent the introduction of 
ASF including through imported products?
    Answer. The Department of Homeland Security's Customs and Border 
Protection (CBP) is an invaluable partner in preventing the 
introduction of invasive diseases, like ASF, into the United States. 
CBP, in coordination with APHIS, is tasked with inspecting travelers 
and cargo arriving into the United States and enforcing APHIS 
regulations at ports of entry. In response to concerns about the 
increased international reports of ASF, APHIS is working with CBP to 
ensure it focuses additional attention on passengers traveling from 
affected countries and enhances its inspections of cargo for illegal 
pork and pork products.
    In addition to the use of risk-based assessments, USDA-trained 
detector dogs are an essential tool for rooting out contraband pork 
products. Detector dog teams search for prohibited agricultural 
products at major U.S. ports of entry (airports and land border 
crossings), as well as mail and cargo facilities. APHIS is working with 
CBP to increase the number of beagle teams from 119 to 184, ensuring 
travelers who may be carrying agricultural products receive secondary 
inspection.
    APHIS also works closely with state animal health officials to 
encourage farms to follow strict on-farm biosecurity protocols and best 
practices, and coordinates with states on response plans should a 
detection ever occur in the U.S. Along with long-term ASF planning, 
APHIS works with state and Federal partners to identify and investigate 
incidents involving sick or dead feral swine to determine if they 
should be tested for ASF or other foreign animal diseases.

    Question 2b. What impacts do you expect this outbreak to continue 
to have on China's demand for soybeans as well as other animal 
proteins?
    Answer. The impact of African swine fever (ASF) has driven China's 
demand for imported meat to record highs this year. USDA forecasts that 
China's pork, beef and chicken meat imports will all reach records in 
2020 due to a more than 20 year low in pork production in China. U.S. 
pork exports to China have more than tripled this year while exports of 
U.S. beef and chicken meat have also made strong gains. China continues 
to rebuild its herd from ASF, and this is now driving a strong recovery 
in feed demand. USDA forecasts that China's soybean imports from the 
U.S. will rise 19 percent in marketing year 2019/20 and make further 
gains next year in large part due to anticipated rebuilding of the 
swine herd. China has also restricted imports of pork from Germany 
following its first confirmed case of ASF. Germany is the number three 
supplier of China's pork imports this year after Spain and the United 
States. This action will likely result in increased pork exports from 
other major suppliers, including the United States. In 2020, the United 
States successfully opened new markets in China for U.S. producers of 
Timothy hay, alfalfa hay pellets and cubes, and barley, all of which 
are used in animal feed.

    Question 2c. How are you working with partners in Canada and Mexico 
on a North American ASF prevention strategy?
    Answer. The U.S., Canada, and Mexico work collaboratively and share 
technical information in an open and transparent manner that supports 
the timely detection and control of swine diseases including ASF in 
North America. In August 2019, the Chief Veterinary Officer (CVO) for 
the United States, along with the CVOs for Canada and Mexico, dedicated 
a special session of the 18th North American Animal Health Committee 
Meeting to discussing ASF, the actions we are taking to prevent its 
spread to North America, and how to minimize the impact of this disease 
should it be introduced into the region.
    In addition to discussing ASF strategies at this meeting, the three 
countries established a Swine Health Working Group to address diseases 
of concern in North America, including ASF. This working group consists 
of government and private industry representatives and meets regularly.
    As USDA continues its productive transnational dialog[ue], we will 
explore all viable opportunities to keep North America ASF-free.

    Question 3. Chronic Wasting Disease threatens farmed and wild deer 
alike. How is USDA working with your counterparts at the Department of 
the Interior and other Federal agencies to get at a comprehensive plan 
to address this disease?
    Answer. The Fiscal Year 2020 agriculture appropriations bill gave 
APHIS an additional $5 million to coordinate chronic wasting disease 
(CWD) activities among state and Federal partners to address the 
disease. In May, APHIS and the Department of the Interior hosted a 
summit with key stakeholders, state departments of agriculture and 
natural resources, and Native American Tribal representatives to 
determine a set of coordinated priorities to help determine funding 
priorities. The summit focused on identifying CWD management priorities 
and knowledge gaps, as well as possible methods to implement prevention 
and control strategies, how to evaluate their efficacy, and the 
development of tools needed to do so. The agreed priorities were:

  A.  improving CWD management of affected farmed herds and free 
            ranging endemic populations

  B.  improving CWD management of affected areas or premises

  [C].  conducting additional research on amplification assays

  [D].  conducting additional research on predictive genetics

  [E].  developing and/or delivering educational outreach materials or 
            programs

    In July, APHIS announced the availability of funding for projects 
aligned with the priorities from this summit. APHIS solicited project 
proposals from states and tribal nations and evaluated them based upon 
these coordinated priorities. The proposals were reviewed by subject 
matter experts from APHIS, Agricultural Research Service, and U.S. 
Forest Service, as well as from agencies in the Department of the 
Interior. APHIS is in the process of awarding these cooperative 
agreements. The projects selected will build upon the connections USDA 
has with state and Federal partners as we work toward our shared goal 
of reducing the CWD's impact and spread.
    APHIS also participates in the Department of the Interior Task 
Force on CWD to discuss the status of current CWD projects, as well as 
further ways the two departments can collaborate on CWD control and 
research.

    Question 4. How is USDA incorporating the China Agreement 
commitments into its commodity forecast reports?
    Answer. Since February, publicly available information and data 
pertaining to the China Agreement has been reflected in USDA's World 
Agricultural Supply and Demand Estimates (WASDE) and related reports 
such as the Outlook for U.S. Agricultural Trade. USDA's trade forecasts 
continue to incorporate actual export sales and market conditions, and 
as part of a broader estimation of supply and demand for major 
commodities, these forecasts also reflect analysis of a wide range of 
economic and market variables in the United States in other countries. 
More details on how the China Agreement is incorporated into USDA's 
trade forecasts may be found in the 2020 U.S.-China Trade Agreement 
report: https://www.usda.gov/sites/default/files/documents/usda-trade-
forecasts-us-china-agreement.pdf. [See Attachment 2].

    Question 5. The issue of establishing separate enterprise units for 
crops under the Federal Crop Insurance Program has emerged in several 
regions of the country. In North Dakota and Montana, producers have 
single enterprise units covering both Spring Wheat and Durum. Yet, 
those are two different crops with different loss ratios and growing 
histories. Combining them into one enterprise unit adversely affects 
the production history of one crop over another, which in turn lowers a 
producer's insurance guarantee and any indemnity that may occur. What 
is the status of RMA's efforts to review and set in motion the 
development of separate enterprise units for Spring Wheat and Durum?
    Answer. RMA is planning to implement changes to allow separate 
enterprise units for Spring and Durum wheat. RMA plans to have this 
change implemented as early as the 2022 crop year.
Questions Submitted by Hon. David Scott, a Representative in Congress 
        from Georgia
1890s
    Question 1. Secretary Perdue, as you know 1890s Land-Grant 
Universities and Colleges produce some of the most qualified leaders 
and workers within the agriculture industry. These individuals not only 
diversify the workforce but also graduate leaders within science, 
technology, engineering, agriculture, and mathematic related fields. I 
myself am a graduate of Florida A&M University and recognize the 
economic importance of these institutions. However, several actions 
from the U.S. Department of Agriculture (USDA) have slowed the much-
needed collaboration between USDA and the 1890s institutions.
    Without Congressional approval, USDA continued efforts to relocate 
essential USDA offices including the Economic Research Service (ERS) 
and the National Institute of Food and Agriculture (NIFA) to Kansas 
City, Missouri. This relocation would remove essential offices from the 
nation's capitol that helps inform key policy decisions related to the 
1890s. In fact, key NIFA and ERS employees have left their role at 
USDA, drastically slowing down assistance to 1890s in receiving grant 
awards or impactful assistance in the management of Federal grant 
programs.
    What are your plans to ensure NIFA and ERS are providing grant 
funds and other essential services to 1890s Land-Grant Universities and 
Colleges given your plans to relocate ERS and NIFA to Kansas City? Has 
USDA replaced the individuals who left their roles in NIFA and ERS?
    Answer. ERS produces and disseminates objective policy-relevant 
research, market outlook official statistics and data on agriculture, 
food, natural resources, and rural America. This work is accomplished 
through internal economists and research economists and also includes 
collaboration with stakeholders, including the 1890 land-grant 
universities. Since relocation to Kansas City in September 2019, the 
agency's essential work continues. The move allows the Agency the 
ability to identify new opportunities to engage with regional and 
national 1890 institutions.
    When NIFA relocated to Kansas City in September 2019, the agency 
retained essential staff associated with the 1890 programs to assist 
with providing grant funds and other essential services to the 1890 
Land-Grant Universities and Colleges. The retained 1890 program staff 
were able to launch two new Farm Bill programs, i.e., Scholarships for 
Students at 1890 Institutions and the Centers of Excellence at 1890 
Institutions; meet with visitors and/or provide services to the 
Universities; and help recruit and train new staff with experience and/
or knowledge of the 1890s. NIFA has recruited new staff and assembled 
an 1890 program team in Kansas City with knowledge of and experience to 
serve the 1890 land-grant universities. NIFA is committed to continue 
to inform key policy decisions and provide excellence in customer 
service to the 1890 community.
    As of the end of August, NIFA has hired 124 new employees in Kansas 
City and plans to bring new employees on board every pay period. The 
Agency currently has 82 total recruitments in process including those 
in the pre-announcement phase, post-announcement phase and posted on 
USAJobs.gov.

    Question 2. Secretary Perdue, as you know, under the Obama 
Administration, a memorandum of understanding (MOU) was signed by USDA 
Secretary Thomas J. Vilsack, and the previous Chairman of the Council 
of 1890s Universities, Dr. Juliette B. Bell. This MOU was signed in May 
2015 and is set to expire in May 2020. The MOU set parameters for 
continued collaboration and coordination between the 1890s institutions 
and USDA so that these institutions, and the students they serve, can 
thrive. However, collaborative efforts between USDA and the 1890s have 
been minimal. In fact, one of the first convenings between USDA and the 
1890s was during my commemorative event, in June 2019, celebrating the 
passage of the 1890s Agriculture Scholarship Program passed into law 
via the Agriculture Improvement Act of 2018 (P.L. 115-334). In this 
meeting, the 1890s Council asked for continued collaboration between 
USDA and the institutions.
    Given that the MOU signed by the Obama Administration is set to 
expire in a few months, what are your plans to meet with the 1890s 
Council?

    Question 2a. Are there any efforts to update the MOU before it is 
set to expire? In these plans, are there plans to expand 1890s 
collaboration beyond NIFA? What are your efforts to create and sign a 
new MOU to continue and advance collaboration between 1890s 
institutions and USDA? To what extent have you reached out to the 1890s 
council to update and modernize the MOU?
    Answer 2-2a. USDA-National Institute of Food and Agriculture (NIFA) 
collaborates with the 1890 Universities to administer six base programs 
with approximately $190 Million in funding. These programs support 
internships, training, faculty exchange opportunities, mentoring, 
investments in facilities and equipment and other collaborative mission 
relevant activities. NIFA held several outreach activities to seek and 
utilize input from 1890s to develop the new 1890s Agriculture 
Scholarship Program and the 1890 Centers of Excellence Program. In 
addition, NIFA organized a listening session in June for the 1890s to 
provide feedback on collaboration with NIFA; and meets regularly with 
the 1890 Association of Research Directors and the 1890 Association of 
Extension Administrators. We also met with the 1890 Presidents at the 
November 2019 Association of Public and Land Grant Universities, and 
have for at least the last two years.
    On December 19, 2019, Secretary Sonny Perdue announced the 
reestablishment of the United States Department of Agriculture (USDA)--
1890 Task Force partnership with the 1890 Council of Presidents. The 
Task Force serves as a principal working group for the Secretary and 
his or her designees to explore mutual beneficial and short and long 
term goals. On March 11, 2020, the 1890 Task Force Committee Members 
participated in a joint meeting with other minority serving 
institutions and USDA, discussing the needs, issues and assets of the 
1890 Institutions, the communities they serve and USDA programs and 
opportunities available to assist. USDA is committed to ensuring 
equitable partnerships and opportunities to maximize outcomes for the 
1890 Institutions and the communities they serve. The next meeting was 
tentatively scheduled for October. The Office of Partnerships and 
Public Engagement (OPPE) has been in constant communication with the 
1890 Task Force Leadership. Due to strain of COVID-19 on 1890 
Institutions of Higher Learning, as well as the Nation, the 1890 Task 
Force Leadership and OPPE agreed to reschedule the meeting at a later 
date. The date is to be determined, in collaboration with the 1890 Task 
Force Leadership.
Rural Broadband
    Question 3. According to the Georgia Broadband initiative, in 2014, 
almost 1.6 million Georgians lacked access to broadband. While the 
state of Georgia has made great strides at the state level, under-
served and rural communities still lack significant access to broadband 
services. I applaud your commitment to awarding up to $550 million to 
expand broadband infrastructure and services in rural America via the 
ReConnect program offered through USDA's Rural Utilities Services 
(RUS). It is essential that we provide these funds to the communities 
who need it the most and avoid duplicative efforts.
    Are you aware of any additional steps that RUS can take, such as 
coordinating more closely with other Federal agencies, like the Federal 
Communications Commission, that track broadband availability and also 
award broadband funding to avoid duplicative spending or overbuilding 
in places that already have broadband?
    Answer. The Agency uses all available information, along with our 
own independent assessment, to ensure our funding goes to the most 
rural unserved communities. We use the information submitted by 
applicants and existing service providers along with any other 
available resources, such as state maps of broadband service and 
information from the FCC and NTIA to independently validate whether 
broadband service is available at the household level. This validation 
often involves the Agency putting ``boots on the ground,'' sending 
staff or contractors out to assess the facilities in the area and talk 
with local residents, government agencies, and businesses to help 
confirm whether sufficient access to broadband service is available.
    Many states are also engaged with mapping of broadband access in 
their state, and we are working closely with those states to 
incorporate their information into our validation process. Similarly, 
we are working with the Department of Commerce to integrate the 
National Broadband Map that they have developed and continue to refine 
into our overall review process. We are also working with our partners 
at the FCC to provide updates on where our program dollars are going to 
avoid duplicative spending and overbuilding.
EQIP
    Question 6. It is estimated that by 2050, the global demand for 
food will be 60 percent higher than it is today. To meet this daunting 
challenge, it is essential that growers have access to technologies 
that will help growers produce more with less, while preserving water 
and other natural resources. Our farm conservation programs are 
intended to help growers access these technologies.
    Cloud-based remote telemetry data systems for irrigation scheduling 
help growers maximize efficiency and increase productivity in a 
scalable and cost-effective manner. For example, in field trials Omaha-
based Lindsay Corporation found that remote telemetry with cloud-based 
irrigation scheduling allowed growers to realize:

   A 3% increase in corn yield (driving profit of $25 per 
        acre);

   A 17% reduction in water usage (saving more than 9.25 
        million gallons on a 130 acre field);

   A $10/acre reduction in energy costs; and

   A 75% reduction in time spent going back and forth to the 
        fields (another $5/acre saved).

    The 2018 Farm Bill states that USDA may provide EQIP payments for 
water conservation scheduling. The accompanying report goes on to state 
that USDA should recognize remote telemetry data systems for irrigation 
scheduling as a best management practice. I sincerely hope that NRCS' 
irrigation efficiency conservation practice standard is updated to 
incorporate this important water and energy saving tool.
    What is NRCS' timeframe for updating its conservation practice 
standards?
    Answer. On August 19, 2020 NRCS Conservation Practice Standard 
(CPS) Irrigation Water Management (Code 449) was updated to include the 
use of remote telemetry data systems with cloud-based irrigation 
scheduling capabilities as a best management practice.

    Question 6a. How does NRCS plan to educate states and growers about 
changes to its conservation practice standards and about the benefits 
of technology such as cloud-based remote telemetry data systems for 
irrigation scheduling?
    Answer. NRCS State offices have received notification on the update 
of our national standards and will be incorporating those changes into 
state level standards. NRCS provides training to field staff on 
standards updates as a normal operating procedure and is determined by 
typical field office workload needs. NRCS publishes standard updates on 
a national webpage and distributes press releases providing public 
notice of standard revisions. Field staff provide information to 
producers that they work with on available conservation practices to 
address resource concerns.

    Question 6b. Is NRCS working to incorporate water conservation 
scheduling payments for technology such as cloud-based irrigation 
scheduling tools into its EQIP regulations?
    Answer. NRCS currently offers financial assistance for the 
implementation and utilization of cloud-based irrigation scheduling 
tools as well as other technologies through the Environmental Quality 
Incentives Program (EQIP), Conservation Stewardship Program (CSP), and 
Agricultural Management Assistance (AMA) Farm Bill conservation 
programs.
Questions Submitted by Hon. Jim Costa, a Representative in Congress 
        from California
    Question 1. How are you evaluating the success of the trade 
assistance packages? What kind of analysis is being conducted to 
estimate the impacts of these programs in the short and long runs?
    Answer. The most recent ERS farm income release from September 
2020, lets us examine the effect of the Market Facilitation Programs on 
the farm sector, particularly, the impact on income and liquidity. 
Payments from the Market Facilitation Programs totaled $5.1 billion in 
2018, $14.2 billion in 2019, and $3.8 billion in 2020. Net farm income 
is estimated at $83.7 billion for 2019. Without MFP, net farm income in 
2019 would have been 17 percent lower. Looking at liquidity, producers' 
debt repayment capacity--(Interest Expenses)/(Net Farm Income + 
Interest Expenses)--was 19 percent in 2019, in the absence of MFP debt 
repayment capacity would have been 22 percent. Improving liquidity in 
one year can have an impact on solvency risk in future years.
    Farmers' exposure to debt is not forecasted to increase 
dramatically for 2020, in part due to Federal commodity support, 
including MFP. The agricultural sector's risk of insolvency, as 
measured by the debt-to-equity ratio, is forecasted for 2020 to be at 
its highest level since 2002, at 16.2 percent. However, this rate is 
low by historic standards, and the likelihood of loan default across 
the ag sector remains historically low. The debt service ratio--a 
measure of the producer's share of production used to cover current 
debt obligations, is projected to decrease in 2020, a consecutive 
decrease from the previous year, but the ratio is still close to the 10 
year average.
    Data on bank sector performance is lagging but is currently 
available to the end of quarter 1, 2020. According to the latest 
financial data from the Kansas City Fed, repayment rates for non-real 
estate farm loans in the first quarter of 2020 were largely unchanged 
over the previous quarter. The share of delinquent non-real estate farm 
loans at commercial banks at the end of Q1 2020 increased 15 percent 
over the previous quarter, to 1.68 percent. Delinquency rates at 
commercial banks have been increasing steadily since 2016 and the Q1 
rate was the highest since Q2 of 2011. For agricultural banks, the rate 
of non-performance on loans--nonaccruing loans or loans past due by 90 
days or more--generally held steady at the end of Q1 2020 relative to 
the previous quarter, but the share of such banks holding 2-5 percent 
of their loans as outstanding increased 22 percent in Q1 of 2020 
relative to the previous quarter.

    Question 2. It was reported that USDA was planning to detail some 
FAS staff to USTR for the purpose of helping review tariff exclusion 
requests. Did that occur and how did USDA compensate for the lost staff 
while trying to continue to promote U.S. ag products elsewhere?
    Answer. To support the Administration's initiative of creating a 
fair and equitable trading environment for Americans, USDA detailed 
three staff for roughly four months to USTR. These individuals assisted 
in reviewing tariff exclusion requests. Due to the short tenure of the 
detail, USDA was able to effectively manage workstreams by adjusting 
workflows, thereby ensuring that our mission of expanding U.S. 
agricultural exports was achieved.

    Question 3. Given the need to implement the Market Facilitation 
Program, what field staff has USDA added to ensure this program didn't 
exasperate existing workload challenges or delay other FSA work?
    Answer. FSA utilized temporary employees to assist with program 
delivery of MFP and other standing programs.

    Question 4. You announced that the initial 2018 round of trade 
assistance would provide up to $12 billion in support. How much money 
actually went out the door in that first round? The second version of 
trade in 2019 was supposed to provide up to $16 billion in support. To 
date, how much of that amount has actually gone out the door?
    Answer. The 2018 MFP payments administered by FSA as of March 5, 
2020, were $8,638,965,831.00 and the 2019 MFP payments were 
$14,368,831,387.51. As of September 25, 2020, the 2018 MFP payments 
were $8,649,570,031.00 and the 2019 MFP payments were 
$14,501,532,316.26.
    As part of the short-term trade mitigation package announced by 
USDA on August 27, 2018, the Foreign Agricultural Service (FAS) was 
given responsibility for administering the Agricultural Trade Promotion 
Program (ATP), one of three new USDA programs created to provide 
assistance to U.S. farmers in response to trade damage from unjustified 
retaliation by foreign nations. In the initial 2018 round of trade 
assistance, the ATP was provided with $200 million in funding. FAS 
allocated the entire $200 million to ATP program participants on 
January 24, 2019. In the second version of trade assistance in 2019, 
the ATP was provided with an additional $100 million in program 
funding. FAS allocated the entire $100 million in additional ATP 
funding to program participants on July 18, 2019.

    Question 5. What is the total amount of purchases that have been 
made through the Food Purchase and Distribution Program? How much more 
is planned? How are you working with recipient organizations to matches 
purchases with need while still having some impact with respect to 
trade damages?
    Answer. Food Purchase and Distribution Program/Trade Mitigation. 
During the past two fiscal years of USDA's trade mitigation purchase 
efforts, over $2.3 billion in agricultural products has been purchased 
and distributed to food banks nationwide. An analysis by the Office of 
the Chief Economists provided the list of commodity groups and target 
amounts to be purchased. As with any USDA commodity purchased for The 
Emergency Food Assistance Program (TEFAP), food bank operators have the 
ability to order as much of a particular commodity as is available. 
During the design process for the trade mitigation program, staff from 
the Agricultural Marketing Service and Food and Nutrition Service 
collaborated to ensure product form and packaging met the needs of food 
bank recipients. Trade mitigation purchases were complete as of the end 
of FY20 with deliveries extending to calendar year 2021.

    Question 6. Would you please outline how you see the National Agro 
and Biodefense Facility working with but not duplicating USDA's 
existing animal disease prevention functions? How are the missions 
distinct and how do we make sure one effort doesn't cannibalize 
resources from the others?
    Answer. NBAF will ultimately replace the existing Plum Island 
Animal Disease Center (PIADC) and all its essential functions. 
Furthermore, once NBAF becomes fully operational, it will provide 
several ``firsts'' for the U.S., including a maximum containment large 
animal Biosafety Level (BSL) 4 facility to study particularly dangerous 
zoonotic agents in large animals, and a Biologics Development Module 
(BDM) to enhance and expedite the transition from research to 
commercially viable countermeasures. This will place NBAF at the nexus 
of the biodefense and agro-defense domains and establish NBAF as a 
global leader among biocontainment laboratories.
    ARS is responsible for research at NBAF. Part of the ARS mission is 
to provide APHIS with the scientific information and tools needed to 
prevent and control a foreign animal disease outbreak in livestock. 
NBAF will not duplicate the existing USDA animal disease prevention 
functions but rather function as a critical component of our biodefense 
infrastructure, consistent with the President's National Biodefense 
Strategy.
    The research mission at NBAF will complement other ARS laboratories 
with a biodefense mission. For example, while NBAF focuses on foreign 
animal diseases of livestock, the National Poultry Research Center in 
Athens, Georgia, specializes on foreign animal diseases of poultry, 
such as highly pathogenic avian influenza and virulent Newcastle 
Disease. While NBAF will be able to research foreign animal diseases in 
small wildlife animal hosts such as bats, the National Animal Disease 
Center in Ames, Iowa, has unique high containment facilities that 
enables research on large wildlife animal species such as bison and 
elk, and focuses on primarily domestic diseases. Importantly, NBAF will 
fill important gaps in our existing biodefense research program and 
allow USDA for the first time to conduct research on especially 
dangerous biosafety level (BSL)-4 agents such as Nipah virus and 
Crimean-Congo Hemorrhagic Fever.

    Question 7. Food for Progress has two principal objectives: to 
improve agricultural productivity and to expand trade of agricultural 
products. Why do you propose to eliminate this program in the recent 
budget request given the current need to open new markets?
    Answer. The President's FY 2021 Budget proposes to eliminate the 
Food for Progress (FFPr) program because development expertise is 
concentrated in other agencies, most notably the U.S. Agency for 
International Development (USAID), which can administer development 
programs at a much lower cost than FFPr. The FFPr program provides for 
the donation of U.S. commodities to developing countries. U.S. 
agricultural commodities donated to recipient countries are sold in the 
local or third-country markets generally at a significant loss to U.S. 
taxpayers and the cash proceeds of those sales are used to fund 
programs that aim to improve agricultural productivity in the recipient 
county. International development programs are also better aligned with 
the USAID mission and expertise. The USAID mission highlights 
international development and humanitarian responses while the USDA 
mission highlights domestic agricultural production. In line with its 
mission, USAID seeks to use food aid to address humanitarian 
objectives.

    Question 8. Recently, USDA announced a recommitment to reducing 
food waste by 50% in line with the United Nations Sustainable 
Development goals.
    How did you established the baseline we are using to measure 
progress?
    Answer. To measure and describe progress against the goal, the 
following two different, but equally important, baselines were chosen 
for the 2030 Food Loss and Waste (FLW) reduction goal:

  i.  For food waste in the United States, EPA's ``Advancing 
            Sustainable Materials Management: Facts and Figures'' 
            (https://www.epa.gov/facts-and-figures-about-materials-
            waste-and-recycling/advancing-sustainable-materials-
            management-0 [See Attachment 3]) provides an estimate of 
            the amount of food going to landfills and combustion with 
            energy recovery from residences, commercial establishments 
            (e.g., grocery stores and restaurants), and institutional 
            sources (e.g., school cafeterias). Pre-consumer food 
            generated during the manufacturing and packaging of food 
            products is not included in EPA's food waste estimates. 
            Using the available data, 2010 was selected as a baseline 
            at 218.9 pounds of food waste per person sent to landfills 
            and combustion with energy recovery. The 2030 FLW reduction 
            goal aims to reduce food waste going to landfills and 
            combustion with energy recovery by 50 percent to 109.4 
            pounds per person.

  ii.  For food loss in the United States, USDA's Economic Research 
            Service (https://www.ers.usda.gov/publications/pub-details/
            ?pubid=43836 [See Attachment 4]) has estimated the amount 
            of available food supply that went uneaten at the retail 
            and consumer levels. In the baseline year of 2010, food 
            loss was 31 percent of the food supply, equaling 133 
            billion pounds and an estimated value of $161.6 billion. 
            The 2030 FLW reduction goal aims to cut food loss at the 
            retail and consumer level in half, by approximately 66 
            billion pounds.

  iii.  Neither estimate provides a comprehensive evaluation of food 
            loss and waste in the United States. However, reductions in 
            both these estimates will provide evidence of progress in 
            reducing food loss and waste and the serious environmental 
            impacts associated with landfilling food. A variety of 
            other data collection efforts across the country will help 
            provide information on other segments of the supply chain.

    Question 8a. How do you intend to accomplish this goal? Will a more 
detailed plan for achieving this goal be discussed with stakeholders 
and/or published by the department? If yes, when?
    Answer. The goal will be accomplished by a multifaceted approach, 
as reflected in the Winning on Reducing Food Waste Initiative (https://
www.usda.gov/foodlossandwaste/winning [See Attachment 5]) (the 
Initiative), a collaborative effort announced in a joint agency formal 
agreement signed in October 2018 by USDA, EPA, and FDA. Through the 
Initiative, the agencies affirm their shared commitment to reduce food 
loss and waste. They also agree to coordinate action to leverage 
government resources to reduce food loss and waste, including action to 
educate Americans on the impacts and importance of reducing food loss 
and waste. To achieve the vision for the Initiative, the agencies 
developed an Interagency strategy (https://www.usda.gov/sites/default/
files/documents/interagency-strategy-on-reducing-food-waste.pdf [See 
Attachment 6]) to prioritize and coordinate their efforts with six 
priority actions areas to reduce food waste:

  iv.  Priority Area 1: Enhance Interagency Coordination

  v.  Priority Area 2: Increase Consumer Education and Outreach Efforts

  vi.  Priority Area 3: Improve Coordination and Guidance on Food Loss 
            and Waste Measurement

  vii.  Priority Area 4: Clarify and Communicate Information on Food 
            Safety, Food Date Labels, and Food Donations

  viii.  Priority Area 5: Collaborate with Private Industry to Reduce 
            Food Loss and Waste Across the Supply Chain

  ix.  Priority Area 6: Encourage Food Waste Reduction by Federal 
            Agencies in their Respective Facilities

    In developing that strategy, the agencies built on information from 
several sources, including, but not limited to:

  x.  (1) Managing for Results: Key Considerations for Implementing 
            Interagency Collaborative Mechanisms (U.S. Government 
            Accountability Office),

  xi.  (2) A Call to Action by Stakeholders: United States Food Loss 
            and Waste Reduction Goal developed by EPA in consultation 
            with USDA,

  xii.  (3) A Roadmap to Reduce U.S. Food Waste (Rethink Food Waste 
            through Economics and Data (ReFED)), and

  xiii.  (4) Don't Waste, Donate: Enhancing Food Donations through 
            Federal Policy (Harvard Food Law and Policy Clinic and 
            Natural Resources Defense Council).

    Activities in these six priority action areas will help reach the 
2030 goal. In addition to the interagency collaborative effort, USDA, 
EPA and FDA each are spearheading their own activities to reduce food 
loss and waste. In February 2020, for example, USDA Secretary Perdue 
announced the Agricultural Innovation Agenda (https://www.usda.gov/
sites/default/files/documents/agriculture-innovation-agenda-vision-
statement.pdf [See Attachment 7]) (AIA), a department-wide effort to 
better align USDA's resources, programs, and research to provide 
farmers with the tools they need to be successful. The mission is to 
increase U.S. agricultural productivity to help meet future demand, 
while cutting the environmental footprint of U.S. agriculture in half, 
with specific goals on water quality, carbon sequestration, renewable 
energy, and reduction of food waste by 2050. The draft AIA report under 
development includes recommendations to further improve U.S. food loss 
and waste metrics. In March 2020, USDA hired a USDA Food Loss and Waste 
Liaison who is actively interacting with stakeholders and collaborating 
with Federal partners to reduce food waste.

    Question 8b. Do you expect to promulgate any new regulations or 
issue any formal guidance related to food waste reduction?
    Answer. There is no plan for new food waste regulation. Confusion 
over the meaning of dates applied to food products can result in 
consumers discarding wholesome food. Therefore, in April 2019, USDA 
issued a new fact sheet on date labeling (https://www.fsis.usda.gov/
wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-
fact-sheets/food-labeling/food-product-dating/food-product-dating [See 
Attachment 8]) on food packages, which includes relevant labeling 
information and a recommendation encouraging food manufacturers and 
retailers that apply product dating to use the ``Best if Used By'' 
phrase to convey quality dates.
    In addition, USDA posted FAQs on the Bill Emerson Good Samaritan 
Food Donation Act and is actively engaged in outreach to consumers and 
manufacturers to increase food donations.

    Question 8c. The 2018 Farm Bill established a new Food Loss and 
Waste Reduction Liaison to coordinate the Department's work on this 
subject. If reducing food waste is a priority for this Administration, 
why did the President's budget request include no funds for this 
position?
    Answer. USDA developed its budget request in coordination with the 
Office of Management and Budget. Reducing food waste is a priority for 
the Administration and we have looked for ways to balance that work and 
forward that agenda while operating within our means. Congress 
appropriated $400,000 in the FY 2020 appropriations for this purpose 
and we have established a fulltime Food Loss and Waste Reduction 
Liaison for FY 2020. We will continue to work through our budget 
process to do our best to support the multiple unfunded requests by 
Congress in the 2018 Farm Bill while balancing our resources to 
successfully meet our funded obligations.
Submitted Question by Hon. Filemon Vela, a Representative in Congress 
        from Texas
    Question. With so many rural communities still on the wrong side of 
the digital divide, it is important that broadband programs focus on 
unserved areas. I understand that the RUS ReConnect program uses a 
``challenge process'' to get input on which areas are served to avoid 
spending funds on places that already have broadband. But, it has come 
to my attention that RUS doesn't release information about how 
challenges were resolved. Do you think that requiring RUS to make 
public how it resolved each challenge prior to awarding funding would 
improve program transparency?
    Answer. Because of the restriction in Section 701 of the RE Act, 
RUS cannot publicly release information submitted by existing service 
providers under a Public Notice Response (PNR). Notwithstanding that 
restriction, however, RUS has been responding directly to PNR 
submitters as to whether or not the information they submitted against 
a ReConnect application was accepted or not, with detailed reasons for 
its decision in the response.
Submitted Question by Hon. TJ Cox, a Representative in Congress from 
        California
    Question. In the 21st Congressional District of California we 
produce a substantial portion of the nation's pulses, such as garbanzo 
and black-eyed peas. Pulses are an amazingly healthy superfood and by 
increasing consumption of pulses our nation has the opportunity to 
improve health and to reduce the future costs of public healthcare. The 
American Pulse Association has $25 million (per year) authorized in the 
2018 Farm Bill by means of the Pulse Crop Health Initiative (PCHI), 
which should be fully appropriated. The funds are for research into the 
health and nutritional aspects of pulses and the funding will go 
directly to ARS. In terms of return on investment this may well be our 
greatest opportunity to improve the eating habits of Americans. Given 
the proceeding, would there be any reason why the USDA would not find 
it useful to fund the PCHI (Pulse Crop Health Initiative) at $25 
million per year? The pulse crop is a great story for America, and it 
needs to be fully supported.
    Answer. Pulses are a group of crops important to American 
agriculture, and increased dietary consumption of pulses could result 
in health benefits and substantial savings related to health care in 
the U.S. The Agriculture Research Service has many resources such 
breeding and processing expertise and the ability to conduct human 
feeding studies that can be leveraged in a collaborative approach. The 
current funding of the PCHI is supporting small clinical trials. 
Additional funding could allow for more robust trials that could 
provide information regarding pulse consumption.
Submitted Questions by Hon. Angie Craig, a Representative in Congress 
        from Minnesota
    Question 1. I appreciate the recognition in USDA's recent climate 
announcement that biofuels can play a significant role in reducing our 
greenhouse gas emissions. I recently led a letter to the House Select 
Committee on the Climate Crisis urging them to include biofuels in 
their upcoming recommendations. I encourage you to continue to push 
your colleagues in the Administration to administer the RFS according 
to Congressional intent--this will lead to greater carbon emission 
reductions. However, EPA's continued abuse on granting Small Refinery 
Exemptions makes it more difficult to reach these carbon reduction 
goals. Do you expect this Administration to cut back on the number of 
Small Refinery Exemptions they've been granting over the past few 
years?
    Answer. We agree that the use of renewable fuels have significant 
benefits in reducing greenhouse gases. USDA continues to work closely 
with EPA to ensure that the statutory provisions of EISA are reflected 
in the annual RFS regulations. The proposed rule for the 2021 Renewable 
Volumetric Obligations is currently under review. Additionally, we note 
the 10th Circuit's decision on Small Refinery Exemptions, and assure 
you that USDA is closely monitoring the application process for small 
refinery exemptions.

    Question 2. Is there an opportunity to extend ARC/PLC election to 
June 30th as was done in 2019? Are there any opportunities to extend 
general enrollment for CRP?
    Answer. We actively monitor program sign ups across the country and 
would utilize registers and potential extensions of deadlines to best 
serve the needs of our customers.

    Question 3. The President's budget included cuts to crop insurance. 
How can we look at cutting the subsidy to crop insurance there by 
increasing the cost of insurance to farmers at a time of financial 
stress in agriculture?
    Answer. The President's Budget strikes a proper balance of 
providing a strong risk management tool for farmers and ranchers in the 
form of crop insurance while also protecting taxpayer interest.

    Question 4. Many dairy farmers have expressed concern about the 
USDA's month cost of production figures. Do you feel this is an 
acceptable price for dairy farmers?
    Answer. The U.S. dairy industry actively trades dairy products in 
the world market and the dairy prices in the United States are a 
function of world supply and demand of dairy products. USDA supports 
the dairy industry with risk management programs like DMC, DRP, and 
other programs and will continue to do so. In implementing the DMC 
program, USDA adjusted the feed equation to better reflect the price of 
premium alfalfa hay for dairy producers.

    Question 5. Farmers have begun to express concern about data 
collection by privately owned companies. What is the Agency doing in 
partnership with other Federal agencies to protect farmer privacy from 
bad actors?
    Answer. FSA only provides information that would be released in a 
FOIA request. If the privately owned company/entity has an MOU/MOA with 
the agency and are deemed a cooperator by the agency, they would be 
bound by the Privacy Act System of Record Notice and Section 1619 of 
the 2008 Farm Bill.

    Question 6. Minnesota farm families often have one spouse who works 
off farm to bring home healthcare coverage. What is USDA doing through 
its new Rural Development leadership to increase access to rural 
healthcare?
    Answer. Access to health care is vital to rural America and is a 
critical component for a prosperous and vibrant rural economy. Rural 
Development can help ensure access to quality health care facilities 
and services by providing loans and grants through its Community 
Facilities, Distance Learning and Telemedicine, and Business and 
Industry programs.
    Last year, the Community Facilities programs invested more than 
$365 million in 80 rural health care facilities and improved health 
care access for over 1.4 million rural residents. These investments 
included critical access hospitals, rural health clinics, assisted and 
skilled living facilities, mental and behavior health, memory care, and 
vocational and medical rehabilitation facilities.
    USDA has hired a Rural Health Liaison, a provision included in the 
2018 Farm Bill, to help promote awareness about and availability of 
USDA resources to support healthy and drug free communities. Rural 
Development is also partnering with other Federal agencies to ensure 
that we connect rural communities to resources that enable better 
provision of rural health care services.

    Question 7. Farmers aren't the only ones feeling the pain of the 
farm economic downturn. What is your agency doing to protect the Main 
Streets that are suffering as a record number of farms file for 
bankruptcy?
    Answer. FSA continues to provide income support, risk management, 
credit, and disaster assistance programs to support farmers and 
ranchers throughout the country.

    Question 8. How will we hold China accountable for their 
commitments in the Phase One of the China deal?
    Answer. Agricultural commitments for both specific reforms of non-
tariff measures and purchase commitments are fully enforceable under 
the agreement. The Administration has used the consultation mechanisms 
in the agreement and other bilateral engagement to press for full 
implementation. This helps explain the strong compliance record on non-
tariff measures, including key outcomes like lifting the ban on U.S. 
poultry, lifting the ban on hormone treated beef, lifting the ban on 
beef from animals over thirty months of age, lifting the ban on poultry 
and bovine ingredients in pet food, lifting the ban on many fruits and 
vegetables (including potatoes, blueberries, Hass avocados, nectarines, 
barley, and hay) and registering dairy, formula, fish, meat, poultry, 
feed, pet food and other products and facilities to export to China. 
Engagement with China has also helped spur Chinese buyers to sign 
significant contracts for bulk commodities in the last several months, 
including soybeans and corn.
Submitted Questions by Hon. Anthony Brindisi, a Representative in 
        Congress from New York
    Question 1. I appreciate your efforts to quickly implement the 
Dairy Margin Coverage program last year. Dairy farmers in my district 
and around the country continue to face market challenges and it's 
important that they have a workable safety net. Section 1401 of the 
farm bill required you to submit a report to this Committee evaluating 
the extent to which the feed cost formula used in Dairy Margin Coverage 
is representative of actual national average costs. This report was due 
60 days after enactment of the farm bill but we haven't received it 
yet. It's important that the national estimate we are using for DMC is 
as accurate as it can be. When do you expect to submit this report to 
the Committee?
    Answer. The DMC report required by Section 1401 of the Farm Bill 
was submitted to the Chairman and Ranking Member on Agriculture, 
Forestry, and Nutrition of the U.S. Senate, as well as the Chairman and 
Ranking Member of the House Committee on Agriculture on July 6, 2020 by 
Secretary Perdue (See Attachment 9).

    Question 2. Thank you for meeting with me and other Members 
recently regarding the needs of hardwood producers. As we have 
discussed, hardwood lumber producers like Gutchess Lumber in my 
district, have not been able to access market facilitation payments 
that other commodities received. Of all the agriculture commodities 
that are exported to China every year, U.S. hardwood lumber is second 
only to soybeans by value. And yet hardwood producers were not part of 
USDA's relief package despite the fact that hardwood sawmills help 
anchor many rural communities with good paying jobs. Mr. Secretary, can 
you explain your methodology for determining the commodities that are 
eligible and ineligible for payments under the Market Facilitation 
Program?
    Answer. MFP provides support for marketing and inventory costs 
caused by disrupted markets resulting from the unfair retaliatory 
tariffs on raw agricultural commodities. I acknowledge that the 
hardwood lumber industry was also affected by these tariffs; however, 
the impacts were felt on processed hardwood lumber. USDA programs are 
intended to provide support at the farmgate on raw agricultural 
commodities and as a result hardwood lumber was not made eligible as a 
processed product.

    Question 3. As we both know, fluid milk consumption has been 
declining in recent years, and this is hurting our dairy farmers across 
the country and rural economies. One bright spot has been the rise in 
other dairy products like cheese and yogurt. I want to encourage more 
demand for these products, which help our dairy farmers. One way we can 
do that is through the National School Lunch Program and School 
Breakfast Program. However, USDA does not credit high-protein Greek 
yogurt appropriately and Greek yogurt is not given credit for the 
protein it contributes when compared to other protein food 
alternatives, which have less protein. The FY20 government funding bill 
report directed USDA to review its decision to maintain the flawed 
crediting standard for high-protein yogurt. Is the USDA currently 
reviewing and considering an update to its protein standards when it 
comes to high-protein yogurt?
    Answer. In the Child Nutrition Programs (CNP), crediting decisions 
are made based on overall nutrient profiles, not a single nutrient. For 
example, different varieties of meat (e.g., lean beef, turkey, legumes) 
are not evaluated separately based on their protein content. Yogurts' 
contribution is based on its limitations at providing niacin and iron 
which are important contributions of the Meat/Meat Alternate component.
    In December 2017, USDA solicited comments on the CNP crediting 
system through a Request for Information (RFI). USDA sought public 
input about specific foods, including yogurt, and asked for 
recommendations to make crediting more simple, fair, and transparent. 
The majority of commenters, including a variety of dairy and yogurt 
producers, associations, and federations, opposed nutrient-based menu 
planning, and opposed crediting high protein yogurt differently than 
other yogurts noting that it would overly complicate the meal pattern 
and protein is not a nutrient of concern.
    After considering public comments, USDA is continuing to credit 
high protein yogurts, such as Greek yogurt, using the same crediting 
method as we do for other types of yogurts. This approach is consistent 
with food-based menu planning and is easier for program operators to 
implement. Crediting high-protein yogurt the same way as other types of 
yogurt, means that the amount of yogurt served is the same for all 
types of yogurt. Operators do not have to remember different portion 
sizes based upon the protein content found on the nutrition facts 
panel. It is also notable that the FDA has only one standard of 
identity for all yogurt varieties. The current serving size for yogurt 
in the CNP is reasonable and adequate based on the age/grade of the 
child.
Submitted Questions by Hon. Kim Schrier, a Representative in Congress 
        from Washington
Origin of Livestock
    Question 1. The Subcommittee on Biotechnology, Horticulture, and 
Research had two hearings last year focused on the organic industry. 
There was strong, bipartisan consensus that the National Organic 
Program should move forward with rulemaking to support the organic 
dairy sector, including on the Origin of Livestock final rule. 
Additionally, in October 2018, USDA's National Organic Standards Board 
issued a resolution for USDA to finalize this rule. This rule would 
correct a loophole in the USDA organic regulations by clarifying 
requirements for transitioning conventional dairy animals to organic 
production. When can we expect to see USDA issue a final rule 
concerning Origin of Livestock?
    Answer. While there is broad support for a final rule in the 
organic community, the topic involves a complex set of variables and 
legal questions. Public comments have also shown there are different 
perspectives and interdependencies between specific rule provisions. As 
AMS drafted the final rule, the specific legal questions and 
complexities became clearer, and the review of the final rule raised 
concerns that could jeopardize the agency's position.
    USDA has considered a number of options and we have decided to 
develop a second proposed rule for public comment. This would allow us 
to propose specific provisions that we believe, based on agency 
experience, would make the rule more enforceable, and which would also 
allow the public to provide input. This rulemaking continues to be one 
of our highest priorities and we plan to publish as expeditiously as 
possible.
U.S. Mexico Agricultural Trade
    Question 2. Mr. Secretary, U.S. fresh potatoes have fought a long 
battle to gain full market access to Mexico. As you know, the Mexican 
potato industry has sued their own government to block that access and 
the resulting legal cases have made their way to their Supreme Court. 
The outcome of a negative ruling could have consequences beyond just 
potatoes and could impair U.S.-Mexico ag trade broadly. What measures 
is USDA taking to support potato access to Mexico and how else are you 
working independently and with USTR to ensure that Mexico fully 
implements their obligations under USMCA?
    Answer. Since my first day as Secretary of Agriculture, achieving 
full and unrestricted access for U.S. potatoes in Mexico has been among 
my top priorities. I have personally met with top-level Mexican 
officials many times to discuss resolving this issue, which could be 
resolved in Mexico's supreme court in the near future. This court case 
has my full attention, and USDA continues considering additional 
options to gain expanded Mexican market access for fresh potatoes.
    USDA, alongside our Federal partners at the Office of the U.S. 
Trade Representative (USTR), continues to engage with Mexico to ensure 
it meets the obligations set out in the USMCA. USDA has engaged with 
high level Mexican government officials to make our position clear. 
Rest assured that we will continue to support and stand with our 
farmers and ranchers as we work to promote free, fair, and reciprocal 
trade as a responsible global partner.
Mid-Contract Management
    Question 3. Mr. Secretary, how are you interpreting Section 2207 of 
the farm bill regarding cost-share assistance for mid-contract 
management activities outside of grazing?
    Answer. FSA's determination is that cost-share is not allowed for 
mid-management activities.
Submitted Questions by Hon. Jimmy Panetta, a Representative in Congress 
        from California
    Question 1. On January 9th, Pam Miller, Administrator of USDA's 
Food and Nutrition Service, testified before the U.S. House Committee 
on Veterans Affairs, Subcommittee on Economic Opportunity. At the 
hearing, Ms. Miller noted that USDA did not seek to understand how many 
veterans would be impacted by the various proposed changes to SNAP 
related to time limits for ``Able-Bodied Adults Without Dependents'' 
(ABAWDs), revising Broad-Based Categorical Eligibility, and state 
heating and cooling Standard Utility Allowances (SUAs).
    Why did you choose not to understand the impact of these proposed 
changes on the veteran population?

    Question 1a. Can you tell us today how many veterans will be kicked 
off SNAP as a result of USDA's proposed and finalized rule changes, and 
how USDA is coordinating with other agencies to ensure that those who 
wore our country's uniform do not suffer from hunger?
    Answer 1-1a. FNS programs, such as SNAP, are not targeted to 
veterans specifically, but can make nutritious food available to 
veterans and their families when they face tough times. In order to 
minimize burden on all Americans seeking food assistance, USDA has kept 
the information it gathers during the application process to only that 
which is required by law and regulation for SNAP eligibility. Veteran 
status is not a requirement for SNAP eligibility. As a result, USDA 
does not have data to determine impacts on households with veterans, as 
veteran status does not impact eligibility and therefore is not 
captured in the caseload data that was used to analyze the rule.
    FNS has a study underway, known as the Survey of SNAP and Work, 
which will gather employment data from a representative sample of 
nondisabled SNAP participants ages 18 to 69 in the 50 States and the 
District of Columbia. The survey includes a question regarding status 
as a veteran or active duty military member. When the study is 
completed, FNS will be able to provide a one-time statistic regarding 
the number of SNAP participants that are active duty military or 
veterans along with some basic demographic characteristics. We expect 
results in 2022.
    The 2014 Farm Bill created the Military/Veteran Agricultural 
Liaison (MVAL) role at USDA. The MVAL reports to the Director of the 
USDA Office of Partnership and Public Engagement (OPPE) and is not 
located within FNS. FNS collaborates with the MVAL to ensure USDA 
assists the Veteran's Administration in advising on SNAP policy and 
providing additional resources for veterans.
    FNS actively works with the Department's MVAL and staff from the 
Veterans Health Administration Homeless Programs Office at the 
Department of Veterans' Affairs (VA) to make sure appropriate reference 
and resource materials are available where and when needed. State 
agencies work closely with partner organizations in their outreach 
efforts, and some of these groups may, as appropriate, create materials 
and provide services to specific populations, including veterans, to 
help them understand and apply for SNAP benefits.
    FNS and VA's Nutrition and Food Services (https://
www.nutrition.va.gov/) (NFS) are also working together to address 
Veterans' hunger and food insecurity. FNS collaborated with NFS to 
deliver a webinar on November 16, 2020, as continuing education for 
nurses and social workers working in the VA system. This webinar 
reviewed the basics of SNAP eligibility and provided specific 
information to screen veterans for food insecurity and provide 
application assistance for veterans interested in applying for SNAP.

    Question 2. We all know that veterans often face unique challenges 
in securing full-time work and may require more than 3 months to secure 
employment.
    Can you guarantee that there is a realistic and sustainable job 
and/or E&T slot available for every veteran who meets the ABAWD 
definition?

    Question 2a. How are you ensuring that states are providing E&T 
opportunities for all veterans?
    Answer 2-2a. Veterans receiving SNAP benefits may be eligible to 
participate in a State's SNAP E&T program. All States are required by 
the Food and Nutrition Act to operate a SNAP E&T program, which assist 
SNAP recipients in gaining skills, training, or experience that will 
increase their ability to obtain work. States are ultimately 
responsible for administering the program and have tremendous 
flexibility in what services they provide, what populations they serve, 
and with whom they partner. FNS provides direct technical assistance 
and oversight to State SNAP agencies to help them expand and improve 
SNAP E&T programs to meet the needs of the participants, the employers, 
and the community.
    USDA is committed to partnering with and empowering State agencies 
to best leverage their programs, and we have made it clear that 
expanding E&T is a priority for this Administration. USDA provides over 
$100 million each year for States to operate E&T, and if a State 
invests their own money--or includes outside funding from any non-
Federal source--to expand and enhance their E&T programs, the Federal 
government will match those funds, dollar for dollar, without limit. In 
addition, FNS also allocates $20 million to States that pledge to 
provide a work or training opportunity to every able-bodied adult 
without dependents.
    FNS has also invested considerable resources in helping States 
expand their SNAP E&T programs through the SNAP to Skills project. SNAP 
to Skills has provided direct technical assistance to over 27 States; 
developed tools and resources such as operations handbooks, policy 
briefs, and webinars; and, hosted SNAP E&T Learning Academies and State 
Institutes for State agencies, their partners, and other stakeholders 
to increase capacity and expertise about SNAP E&T. In 2020, the SNAP to 
Skills project has focused on helping States recruit and engage more 
SNAP recipients in SNAP E&T programs, including veterans.
    Moreover, FNS is in the process of drafting a final rule 
implementing the employment and training provisions of the 2018 Farm 
Bill. The rules strengthens States accountability by requiring States 
to provide case management services and to ensure SNAP recipients are 
properly placed in an E&T component, and provides additional 
opportunities for SNAP recipients to meet their work requirements 
through participating in programs offered through the Department of 
Veteran's Affairs.

    Question 3. How is USDA addressing the SNAP participation gap among 
veterans?
    Answer. While FNS's 15 nutrition assistance programs are not 
targeted specifically to veterans, they are available and designed to 
provide benefits that veterans and their families may need, 
particularly when they face difficult economic circumstances.
    FNS reimburses State SNAP agencies for 50 percent of allowable 
administrative costs, including costs of approved outreach activities. 
In FY 2020, 46 State SNAP agencies have approved outreach plans. Plans 
may be statewide or target specific geographic locations or 
populations, such as veterans. Several States partner with Veterans 
Service Organizations (VSOs) to provide SNAP outreach services.

    Question 4. You have established a Military Veterans Agriculture 
Liaison at USDA.
    What exactly is this position, and/or the agency, doing to address 
the gap between food insecurity and SNAP enrollment among veterans?
    Answer. The 2014 Farm Bill created the Military/Veteran 
Agricultural Liaison (MVAL) role at USDA. The MVAL reports to the 
Director of the USDA Office of Partnership and Public Engagement (OPPE) 
and is not located within FNS. FNS collaborates with the MVAL to ensure 
USDA assists the Veteran's Administration in advising on SNAP policy 
and providing additional resources for veterans.
    The MVAL duties include:

   Providing information to returning veterans about beginning 
        farmer training and agricultural vocational and rehabilitation 
        programs, including assisting veterans in using Federal veteran 
        educational benefits for purposes relating to beginning a 
        farming or ranching career;

   Providing information to veterans about the availability and 
        eligibility of requirements for participation in agricultural 
        programs, with emphasis on beginning farmer and rancher 
        programs;

   Serving as a resource for assisting veteran farmers and 
        ranchers, and potential farmers and ranchers, in applying for 
        participation in agricultural programs;

   Advocating on behalf of veterans in interactions with 
        employees of the Department; and

   Consulting with and providing technical assistance to any 
        Federal agency, including the Department of Defense, the 
        Department of Veterans Affairs, the Small Business 
        Administration, and the Department of Labor.

    The current MVAL is a permanent government employee with 23 years 
of Naval service. He has proactively established relationships with 
Federal agencies including the Department of Labor, Department of 
Defense, Department of Veterans Affairs, Small Business Administration, 
as well as the National Association of State Departments of 
Agriculture, and Workforce Agencies as well as many Veteran Service 
Organizations and the Farmer Veteran Coalition.
    FNS works with the Department of Veterans Affairs (VA) to 
communicate information on USDA nutrition assistance programs to be 
provided when to veterans they visit VA Hospitals or Clinics. USDA is 
working with VA on resources specifically designed for Veterans to help 
connect them with USDA nutrition programs when they visit VA hospitals 
or clinics, or otherwise engage with the VA health system.

    Question 4a. What are the ways USDA is addressing the stigma and 
shame that is unfortunately often associated with Federal nutrition 
assistance programs?
    Answer. SNAP outreach is the main effort to address misconceptions 
about SNAP. Through SNAP outreach efforts, States, often in partnership 
with community organizations, conduct activities to inform low-income 
households about SNAP availability and benefits, eligibility 
requirements, and application procedures. Outreach can also correct 
myths and misperceptions about SNAP. FNS reimburses State SNAP agencies 
for 50 percent of allowable administrative costs, including those for 
approved outreach activities. In FY 2020, 46 State SNAP agencies have 
approved outreach plans. Plans may be statewide or target specific 
geographic locations or populations, such as veterans. Several States 
partner with Veterans Service Organizations (VSOs) to provide SNAP 
outreach services. In addition to outreach, it is important to 
publicize the fact that benefits are now provided on SNAP EBT cards--
which look like credit or debit cards--rather than actual food stamps 
that were issued previously, which has significantly reduced stigma 
surrounding SNAP over the years.

    Question 4b. What is USDA doing to clarify for veterans that SNAP 
is an entitlement program, so their participation would not prevent 
someone else from getting the help they need?
    Answer. SNAP Outreach activities and resources supports States in 
providing information about SNAP, supporting potentially eligible 
people, including veterans, in making an informed decision about 
whether or not to apply. State agencies set outreach goals and 
determine which services to provide in order to best address the needs 
identified by the State.
    We understand from discussions with VA staff, that the Veterans 
Health Administration (VHA) screens veterans during their VHA medical 
appointments and refers them to appropriate clinical resources, which 
can include information on SNAP when appropriate.
Question Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question. It has come to our attention that there is a lot of 
confusion surrounding the implementation of the TAP assistance program 
reaching back to damage from Hurricane Irma in September 2017. The 
confusion involves the definition used for qualifying nursery crops for 
assistance specifically ``bush'' and ``ornamental.'' Producers were 
approved at the state and local level and then determined to be 
ineligible at the Federal level because they did not meet the 
definition of an eligible crop.
    Are nursery crops such as chrysanthemum, poinsettia, rose, fig, 
blackberry, hibiscus, and bougainvillea eligible for disaster 
assistance under the TAP program? If ineligible, provide the rationale 
why. In addition, a list of all eligible ornamentals and bushes under 
the TAP program is requested.
    Answer. Yes, these crops would be eligible either as a listed 
commodity or under ``nursery'' field or ``nursery'' container. The Farm 
Service Agency does not maintain a list of eligible trees, bushes, or 
vines under the Tree Assistance Program (TAP). TAP provides definitions 
of what is eligible, and County Committees are empowered to make an 
eligibility determination. The definitions for TAP can be found at 7 
CFR 1416.402, and in FSA handbook, 1-TAP, (Revision 4), Exhibit 2. With 
regards to a recent determination of ineligibility for chrysanthemums, 
the guidance was reversed at the national level on March 17, 2020, and 
subsequently communicated to the Florida FSA State office.
Question Submitted by Hon. Roger W. Marshall, a Representative in 
        Congress from Kansas
    Question. Last fall, several of my colleagues and I sent a letter 
requesting that you consider changes to the ReConnect program to make 
the application process less burdensome so that more broadband 
providers could participate. I know that some changes were made in 
round two, but I would encourage you to continue to look at this 
situation, particularly in regard to the scope of information that 
companies have to submit for areas outside of the proposed service 
area. For companies that have a regional or even nationwide footprint, 
this extraneous information makes the application process much more 
burdensome, without any added benefit, and could lead to well-qualified 
companies with long history of broadband deployment deciding that the 
application process is just too burdensome to be worthwhile.
    Is this something you can continue to work on for future rounds of 
ReConnect?
    Answer. Yes, we will continue to implement new ways to streamline 
and improve the overall application process for future rounds of 
ReConnect. Considerations like these will be incorporated in the Final 
Rule which the agency expects to publish in the Federal Register for 
public comment by the end of 2020.
Question Submitted by Hon. Don Bacon, a Representative in Congress from 
        Nebraska
    Question. Last week in a letter to the President, my Governor, 
along with four others, highlighted the importance of new 
biotechnologies, such as gene editing, for maintaining the security and 
stability of the rural economy and nation's food supply. To that end 
they called on the Administration to move all agricultural application 
of biotechnology in animals for food use under USDA to better foster 
development of this technology for the public good.
    Can you give us an update on Administration's thinking on this 
request? Will the Administration have a resolution on this in the next 
month or 2?
    Answer. USDA believes that leveraging biotechnology and the 
advantages it provides to our producers is key to revitalizing the 
rural economy. We understand the need to stay on top of scientific 
progress and the need for tools such as gene editing and appropriate, 
science-based regulation at the Federal level. We know that animal 
biotechnology holds promise as a solution to some of the most pressing 
problems facing livestock production. Accordingly, modernizing animal 
agricultural biotechnology oversight continues to be a priority for us. 
We are continuing high-level discussions with our Federal partners and 
hope to have a resolution soon that will help this technology thrive.
Question Submitted by Hon. Neal P. Dunn, a Representative in Congress 
        from Florida
    Question. Many organic farmers are faced with growing disease and 
environmental pressures, and yet all too often lack approved organic 
crop protection tools to meet their needs. Breeding disease resistant 
cultivars can help, but in recent years, diseases like downy mildew, as 
one example, have evolved faster than breeders can keep up. However, 
new tools such as gene editing can enable plant breeders to quickly and 
precisely make edits to a plant's genome in ways that mimics natural 
adaptation or through traditional breeding. This could help to activate 
disease resistance, limit the use of organic-approved pesticides, 
improve drought tolerance, among other benefits.
    Do you see certain sustainability-minded biotechnology applications 
such as these to potentially be consistent with the organic program?
    Answer. USDA supports an ongoing and open, constructive dialogue 
about how agricultural innovation and new technologies might play a 
role in the future of organic production. Genetic modifications, 
including gene editing, are considered excluded methods and are 
currently prohibited in organic agriculture under the USDA organic 
regulations. This issue is not currently on the regulatory agenda for 
rulemaking; however, the National Organic Standards Board regularly 
evaluates new technologies for potential inclusion in the organic 
standards. Public comments are an important part of this open and 
transparent evaluation process.
Question Submitted by Hon. Dusty Johnson, a Representative in Congress 
        from South Dakota
    Question. Saturated fats are found in nearly all food products, 
including olive oil, meat products, and dairy products. However, past 
dietary guidelines relied on older, epidemiological studies rather than 
newer systematic reviews and clinical trials. Recently, the Annals of 
Internal Medicine published a systematic review of the potential 
hazards surrounding red meat. The conclusion of the review found that 
there is not enough evidence to suggest that Americans change their 
consumption of red meat as a part of a healthy or balanced diet, 
representing a fairly significant shift from conventional wisdom. As 
recently as last month, a group of prominent researchers and doctors in 
the nutrition space, including three former Dietary Guidelines Advisory 
Committee Members, came together to discuss not only the changing 
scientific landscape surrounding saturated fats, but the process by 
which saturated fats studies have gone through in previous versions of 
the guidelines.
    Do you agree that any recommendation should have a basis in the 
preponderance of the best available science? Would you agree that 
evidence be examined even if it challenges preconceived notions about 
the benefits or hazards posed by any food or nutrient?
    Answer. To briefly answer both of your questions--yes. USDA and HHS 
update the Dietary Guidelines for Americans every five years based on 
the preponderance of scientific and medical knowledge, and with each 
process to develop the Dietary Guidelines the Departments ensure that 
all relevant nutrition evidence is examined and reviewed--independent 
of preconceived notions or even trending fad diets.
    The Nutrition Evidence Systematic Review (NESR) method, which has 
been used by the past few Dietary Guidelines Advisory Committees, is 
designed to identify and use all relevant evidence to draw 
conclusions--regardless of the outcomes or results it reported, and 
whether or not it supported or opposed prior advice. For each 
systematic review--before the scientific literature is searched and the 
evidence is reviewed--a protocol or a plan is established for a 
specific scientific question. This protocol describes how the Committee 
plans to conduct its review and sets the criteria for what studies 
would be considered. Developing this protocol up front before any 
articles are searched and any evidence is reviewed is critical to 
ensuring the process remains unbiased. The protocols for the 2020 
Dietary Guidelines Advisory Committee (the 2020 Committee) were posted 
online for the public to view and comment on, and the 2020 Committee 
considered these comments as they moved forward in examining the 
evidence.
    Specific to examining the evidence on saturated fat, the 2020 
Committee recently reviewed the scientific landscape. The 2020 
Committee was an independent group of nationally recognized nutrition 
experts, and they conducted a robust systematic review on dietary fats 
and the risk of cardiovascular disease by examining the evidence from 
2010 to 2019. It is important to note that the work of the 2020 
Committee builds upon the work on this topic from the 2015 Committee. 
The extensive review by the 2015 Committee on saturated fats included 
literature dating back to the 1960s. The 2020 Committee concluded that 
strong and consistent evidence from randomized controlled trials shows 
that replacing saturated fat with unsaturated fats, especially 
polyunsaturated fat, significantly reduces total and LDL-cholesterol in 
adults. LDL-cholesterol is a validated biomarker for cardiovascular 
disease. Additionally, the 2020 Committee found strong evidence 
demonstrating that replacing saturated fat with polyunsaturated fat in 
adults reduces the risk of coronary heart disease events and CVD 
mortality. The 2020 Committee also reviewed literature published 
between 1990 and 2019 on intake during childhood and found strong 
evidence for a link between diets lower in saturated fat and total and 
LDL-cholesterol. Therefore, the preponderance of evidence from the 
present dating back to the 1960s on saturated fat indicates that lower 
saturated fat intake leads to better health outcomes.
Questions Submitted by Hon. James R. Baird, a Representative in 
        Congress from Indiana
    Question 1. As you know, rural America is a diverse place. Some 
small towns and cities are doing well, while others have been 
struggling in recent years. Many constituents of mine in the more hard-
hit towns have repeatedly asked ``What programs are there to help us?'' 
As you know, the USDA has a myriad of rural economic development 
programs. It seems to me that many people just don't know what's 
available to help.
    What efforts are the USDA undertaking to inform and educate people 
about its rural development programs? What state and local groups do 
you work with to get the word out about these programs?
    Answer. Rural Development has 477 field offices across the country 
and our staff work with local leaders, lenders, and businesses to 
inform the community about our programs. A few ways our staff does this 
is by hosting and attending roundtables, providing technical assistance 
to prospective applicants, and updating our webpage to include current 
fact sheets, guidance documents, and notices. Communication with our 
customers and those who need assistance is a priority for Rural 
Development. For example, during the third quarter of 2020 RD hosted 32 
COVID-related webinars, 24 non-COVID webinars, and participated in 
webinars hosted by others in the Federal family, including HHS, HUD, 
and SBA. This outreach has helped us connect with nearly 3.5 million 
people.

    Question 2. The overall American economy has been kicked into high 
gear by the President's agenda. Unfortunately, due to low crop prices 
and rough weather, the ag economy has faced challenges. Many in my 
district have talked to me about the need for economic diversity where 
they live. Simply put, agriculture alone is not enough to sustain some 
of these communities anymore; more economic growth is needed to 
generate the economic diversity that will bring more sustainable 
economic growth.
    What has USDA been doing to ensure that rural communities can 
develop other robust industries alongside agriculture?
    Answer. The Rural Business Cooperative Service (RBCS) fosters a 
direct engagement with specific industries such as renewable energy, 
local and regional food, forestry, aquaculture, biofuels, biobased 
products and others to connect a variety of businesses to our programs. 
RBCS provides rural businesses and communities the necessary capital to 
expand and grow and has an extensive working relationship with the 
rural lender community, credit unions, community development financial 
institutions (CDFIs), and others lender associations to create an 
awareness of access to capital opportunities. Additionally, our 
Community Facilities program can be utilized by rural hospitals, 
schools, and adult and childcare centers which can help increase the 
competitiveness of rural communities in attracting and retaining 
businesses.
Questions Submitted by Hon. Jim Hagedorn, a Representative in Congress 
        from Minnesota
    Question 1. While this may be outside of USDA's purview, Minnesota 
dairy farmers have asked my office to get clarification on the use of 
the term ``dairy product'' when it is in fact a ``dairy imitation,'' 
such as Almond Milk. Many Members of this Committee have urged the Food 
and Drug Administration to enforce existing ``dairy product standards 
of identity.'' Groups like the American Academy of Pediatrics have 
voiced concerns about nutritional levels of such products for children.
    Have you had any conversations with your counterparts at the FDA 
about this issue?
    Answer. USDA respectfully encourages the Congressman to direct 
questions related to this topic to the FDA.

    Question 2. Thank you for leading USDA's effort in preventing 
African Swine Fever (ASF) from reaching our country. APHIS, along with 
CBP at the Department of Homeland Security, have also done remarkable 
work in coordinating with state veterinarian officers, industry leaders 
and international partners. One concern I hear from the hog producers 
in my district is a lack of clarity on how to prevent the spread of ASF 
from infected premises.
    While we were pleased to see the March 6, 2020 announcement from 
USDA on APHIS's action plan in case of an ASF outbreak, can we get more 
information on how ``USDA will work proactively with industry and 
states to ensure producers have heard plans to deal with carcass 
disposal in line with regional and local requirements, supporting 
composting and burial in place as preferred options?'' Additionally, 
will these efforts require a cost-share agreement with the states?
    Answer. USDA's Animal and Plant Health Inspection Service (APHIS) 
has created a Carcass Management Dashboard that assists producers with 
planning for the proper disposal of carcasses safely and in 
coordination with state and local environmental officials. This online 
tool provides information on a range of disposal methods, as well as 
resources on coordinating with state and Federal agencies to ensure 
compliance with all applicable laws and regulations.
    APHIS is also evaluating several carcass-disposal projects 
submitted by states and other entities as part of the National Animal 
Disease Preparedness and Response Program. The program, which was 
created in the 2018 Farm Bill, allows APHIS to fund projects that 
advance animal health, and depopulation and disposal projects are at 
the top of our funding priorities. Last year, six projects were 
selected to train animal disease outbreak responders to perform 
depopulation, disposal, and infection, including a project to ``train 
the trainers'' on carcass management, which is a critical step toward 
nationwide preparedness. APHIS plans to announce the final FY 2020 
projects under this program by the end of the year.
    During previous outbreaks, such as highly pathogenic avian 
influenza in 2015, USDA paid for disposal of carcasses directly through 
contractors or reimbursed producers for the costs, and we anticipate a 
similar response for ASF.

    Question 2a. As a follow up, a potential ASF outbreak will require 
many boots on the ground, as well as virtual deployments, to coordinate 
testing. With a shortage of veterinarians in the U.S., have there been 
any conversations with state animal health boards and industry on how 
to speed up training or how to bring on additional staff?
    Answer. APHIS is not currently experiencing a shortage of 
veterinarians, with approximately 95% of positions filled. We are 
proactive in our hiring efforts to find the most talented employees to 
fill our workforce. In particular, we have a Veterinary Medical Officer 
Career Program to bring in entry-level and graduating veterinarians by 
offering training and a full-time position to successful applicants, 
and we have internship programs to introduce veterinary students to a 
career with APHIS while they are still completing their education and 
can lead to a permanent appointment. After the 2014-2015 outbreak of 
highly pathogenic avian influenza, APHIS requested additional funds to 
increase the number of personnel focused on animal health issues to 
help with potential outbreaks in the future. We appreciate Congress' 
willingness to fund those positions.
    In addition to seeking the most qualified veterinary candidates to 
directly work on our mission of promoting animal health, APHIS supports 
the National Veterinary Accreditation Program (NVAP), which authorizes 
private practitioners, as well as academic, corporate, military, 
research, and government veterinarians, to perform official regulatory 
functions and to work cooperatively with state animal health officials. 
NVAP develops training programs for Accredited Veterinarians and lay 
personnel on sample collection and submission and on recognizing 
diseases. These training opportunities are developed in conjunction 
with APHIS, state regulatory officials, and academia, with much support 
from the funding and programs provided by the farm bill and cooperative 
agreements with stakeholders. Collectively, NVAP is essential to 
ensuring the nation has a cadre of veterinarians responsible for animal 
health, disease prevention, and preparedness issues of the future.
    In the case of an animal disease emergency, APHIS also has the 
ability to add additional veterinarians to its workforce. For example, 
during the 2014-2015 HPAI outbreak APHIS utilized the National Animal 
Health Emergency Response Corps to supplement the agency's veterinary 
workforce. We also have an agreement with the Department of Defense, in 
which APHIS can request veterinarians from the Army Veterinary Corps 
for an emergency response to an animal disease outbreak. Furthermore, 
we are member to a multilateral agreement with Australia, Canada, 
Ireland, New Zealand, and the United Kingdom, where we can request 
another country to participate in an emergency response to an animal 
disease outbreak. APHIS continues to explore various strategies to 
engage the nation's veterinarians in preparation for a possible serious 
animal disease outbreak.

    Question 3. Regarding staff shortages at the local Farm Service 
Agency (FSA) offices, I agree that a robust economy and record low 
unemployment makes it harder to fill these positions.
    Has USDA discussed with the Office of Personal Management about 
streamlining hiring process?

    Question 3a. As follow-up, I understand the Agricultural Marketing 
Service has used direct hiring authorities to hire fruit graders during 
peak seasons. Is it possible for FSA to use this authority to hire 
staff during peak periods?
    Answer 3-3a. FSA utilized a variety of stream-lined processes for 
county office hiring and nearly every tool in our toolbox through FY 
2020. In December 2019, FSA obtained Office of Personnel Management 
direct hire authority for 75 permanent Farm Loan Program Technicians 
and 78 permanent Farm Loan Officer Trainees and filled all those 
positions on September 2, 2020. We brought back reemployed annuitants 
who have the knowledge and experience to get up to speed on program 
delivery quickly.

    Question 4. Thank you for your comments on February 20, 2020 on a 
possible MOU with the Food and Drug Administration regarding animal 
biotech regulations. It is no secret that many farmers, ranchers, 
producers and agribusinesses are frustrated with FDA's approach to this 
game changing technology. As the proud representative of a top pork 
producing district, capitalizing on new animal biotech technologies 
will show the world that the U.S. is the leader in agriculture 
innovations.
    While product safety is the number one priority, what is USDA doing 
to modernize safety protocols at ARS/ERS research labs, as well as 
APHIS regulations, in order to be ready for a possible MOU?
    Answer. USDA believes that spurring innovation is key to 
revitalizing the rural economy, and a thriving biotechnology industry 
is essential to those efforts. We understand the need to encourage 
scientific progress with tools like gene editing, as well as the 
importance of science-based regulation at the Federal level. Animal 
biotechnology holds promise as part of a solution to some of the most 
pressing problems facing livestock production. Accordingly, modernizing 
animal agricultural biotechnology oversight continues to be a priority 
for us. We are continuing high-level discussions with our Federal 
partners and hope to have a resolution soon that will help this 
technology thrive. As we continue to weigh our next steps with regards 
to a possible MOU with FDA, we will take all appropriate actions to 
ensure all of USDA is ready.
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Trade Damage Estimation for the 2019 Market Facilitation Program and 
        Food Purchase and Distribution Program
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
U.S. Department of Agriculture, Office of the Chief Economist
August 22, 2019
Executive Summary
    This paper outlines the methodology USDA employed to estimate the 
level of gross trade damage caused by retaliatory tariffs to U.S. 
agricultural exports by commodity. Those estimates were used to 
determine the 2019 Market Facilitation Program (MFP) payment rates and 
the value of commodities to be targeted for purchase under the 2019 
Food Purchase and Distribution Program (FPDP). The paper also outlines 
the formulas employed to calculate MFP county rates for non-specialty 
crops, as well as national MFP rates for specialty crops, hogs, and 
milk. USDA announced details on those programs on July 25, 2019. For 
more details about the trade mitigation programs, visit https://
www.farmers.gov/manage/mfp. Rulemaking and related documents, including 
the Cost Benefit Analysis (CBA), for trade mitigation programs can be 
found at https://www.regulations.gov/docket?D=CCC-2019-0003.
Trade Damage Estimation for the 2019 Market Facilitation Program (MFP) 
        and Purchase Targets for the Food Purchase and Distribution 
        Program (FPDP)
    On May 23, 2019, the Secretary of Agriculture announced (https://
www.usda.gov/media/press-releases/2019/05/23/usda-announces-support-
farmers-impacted-unjustified-retaliation-and) that USDA would take 
several actions to assist farmers in response to continued retaliation 
and trade disruption. President Trump authorized USDA to provide up to 
$16 billion in programs, in line with the estimated impacts of 
retaliatory tariffs on U.S. agricultural producers and other trade 
disruptions. Further details of the 2019 trade mitigation program were 
announced (https://www.usda.gov/media/press-releases/2019/07/25/usda-
announces-details-support-package-farmers) on July 25, 2019.
    In 2018, USDA developed an estimate of gross trade damages for U.S. 
commodities affected by retaliatory tariffs to establish commodity 
payment rates for the Market Facilitation Program (MFP) and purchase 
targets for the Food Purchase and Distribution Program (FPDP). On 
September 13, 2018, USDA provided a detailed accounting of how those 
gross damage estimates were calculated.\1\
---------------------------------------------------------------------------
    \1\ For details see: https://www.usda.gov/oce/trade/
USDA_Trade_Methodology_Report.pdf.
---------------------------------------------------------------------------
    For the 2018 and the 2019 trade mitigation programs, USDA defined 
economic losses due to the trade actions in terms of gross trade 
damages. Gross trade damages were defined as the total amount of 
expected export sales lost to the retaliatory partner due to the 
additional tariffs. This metric provides one assessment of economic 
loss, and there are other forms of economic injury that could be 
measured. Gross trade damage contributes to the economic cost to the 
producer to adjust to the disrupted markets, manage surplus 
commodities, and expand and develop new markets, consistent with the 
design of the MFP. Further, export sale losses provide the most direct 
link to the retaliatory action(s) and is the single estimate that most 
comprehensively accounts for the full scale of trade impacts. In part 
due to these reasons, it is often employed in World Trade Organization 
(WTO) arbitrations assessing the level of nullification or impairment 
resulting from a measure found to be WTO-inconsistent and is the 
approach applied here.
    For the 2019 program, USDA employed the same methodology to 
estimate gross trade damages, using the same trade model (Global 
Simulation Analysis of Industry-Level Trade Policy) documented in 2018. 
That model simulates the expected reduction in U.S. exports to the 
retaliatory partner market. Gross trade damages are calculated as the 
difference in bilateral trade with the tariff and the baseline (without 
the tariff).
    As with the 2018 trade mitigation programs, the gross trade damage 
estimate is the basis for developing the 2019 MFP payment rates, which 
are detailed in this paper, as well as FPDP purchase targets. The 2019 
programs are designed to aid producers in the disposition of surplus 
commodities; to aid in the expansion of domestic markets; or to aid in 
the development of new and additional markets and uses. Those programs 
are intended for crops or commodities that are negatively impacted by 
trade actions of foreign governments. Specifically, the 2019 MFP 
payments may provide producers with an opportunity to adjust to delays 
in the marketing of their crops and to costs associated with 
reorienting their sales to new and additional markets.
Changes in Retaliatory Tariffs
    The gross trade damage estimate for 2019 takes into account changes 
in retaliatory tariffs since the original damage estimate used for the 
2018 trade mitigation programs. There have been five changes to the 
retaliatory tariffs applied to U.S. agricultural products since the 
2018 damages were calculated:

  (a)  On September 24, 2018, China imposed additional tariffs ranging 
            from 5 to 10 percent on U.S. goods, which were applied to 
            $3 billion of agricultural products not previously impacted 
            by China's retaliatory tariffs. Given the timing of China's 
            action, these tariffs were not included in the trade damage 
            analysis for the 2018 trade mitigation programs.

  (b)  On May 17, 2019, Mexico and Canada agreed to lift all 
            retaliatory tariffs related to the U.S.-imposed Section 232 
            steel and aluminum tariffs. These tariffs covered a broad 
            range of agricultural and food products, including U.S. 
            pork and dairy.

  (c)  On May 21, 2019, Turkey reduced retaliatory tariffs assessed on 
            U.S. products by half in response to changes in U.S.-
            imposed Section 232 tariffs on steel and aluminum from 
            Turkey. Turkey's retaliatory tariffs include some U.S. tree 
            nuts and rice.

  (d)  On June 1, 2019, China increased retaliatory tariffs assessed on 
            the U.S. on almost $2 billion of agricultural goods by an 
            additional 5 to 15 percent. This new list includes many 
            U.S. horticultural and specialty products.

  (e)  On June 16, 2019, India imposed retaliatory tariffs ranging from 
            2 to 25 percent on U.S. apples, rice, almonds, chickpeas, 
            and other commodities. India had announced retaliatory 
            tariffs on U.S. goods in July 2018 but delayed 
            implementation until June 2019.

    The model commodity coverage was expanded to include the broader 
range of U.S. agricultural products affected by retaliation, as well as 
the increase in (China) or implementation of (India) retaliatory 
tariffs. The model scenarios were also revised to remove the 
retaliatory tariffs that Canada and Mexico lifted, as well as the 
reduction in Turkey's tariffs.
Base Year Changes Account for Long-Standing Distortionary Policies and 
        Longer-Term Impacts
    For the 2018 trade mitigation programs, USDA employed 2017 trade 
data as the base year for projecting trade damages. 2017 was used as 
the 2018 programs' base year because it was the most recent full year 
of trade data available and reflected trade levels prior to the 
imposition of retaliatory tariffs starting in April 2018 for some 
agricultural products.\2\
---------------------------------------------------------------------------
    \2\ In April 2018, China was the first trading partner to impose 
retaliatory tariffs on U.S. agriculture in response to Section 232 
tariffs on aluminum and steel. Nearly all retaliatory tariffs--
including those imposed by China in response to actions under Section 
301 and Section 232, as well as those imposed by the EU, Canada, 
Mexico, and Turkey in response to actions under Section 232, were in 
place by July 2018. India was the only country that announced but did 
not immediately apply retaliatory tariffs on U.S. agricultural products 
in 2018.
---------------------------------------------------------------------------
    For the 2019 trade mitigation programs, USDA employed a longer 
time-series to estimate gross trade damages, by surveying trends in 
U.S. bilateral trade over a 10 year period (2009-2018). For some of the 
commodities affected by tariffs, 2017 was not the most representative 
base year on which to conduct the trade damage analysis. The 10 year 
period for determining a basis for the evaluating the tariff allows 
estimates to account for other contributing variables, such as 
longstanding trade barriers imposed by China and other countries that 
have affected U.S. exports, as well as the longer-term impact of 
prolongedretaliatory tariffs.\3\
---------------------------------------------------------------------------
    \3\ To be clear, the model estimates the impact of the retaliatory 
tariff(s) on a given commodity.
---------------------------------------------------------------------------
    We included 2018 in this time-series, given that for some 
commodities, new market access had only just begun prior to the 
implementation of retaliatory tariffs. For example, in mid-2017, China 
and the United States agreed to improve market access for U.S. beef 
exports to China.\4\ U.S. beef exports began to increase in late 2017 
through the first half of 2018 before declining and leveling-off. U.S. 
beef had been banned from China since 2003, and prior to that ban, the 
United States was the country's largest beef supplier. Therefore, it is 
reasonable to expect that, but for the retaliatory tariffs that China 
imposed on U.S. beef in July 2018, U.S. beef exports to China would 
have continued to increase at a similar (if not higher) level as 
observed in the first half of 2018. Using 2017 as a base year does not 
fully capture the new market access opportunities for U.S. beef.
---------------------------------------------------------------------------
    \4\ On June 12, 2017, USDA announced that it had reached an 
agreement with Chinese officials on the final details of a protocol to 
allow the United States to begin exporting beef to China. See https://
www.usda.gov/media/pressreleases/2017/06/12/us-china-finalize-details-
send-us-beef-china.
---------------------------------------------------------------------------
    Other commodities have faced multi-year market access barriers into 
China and other countries that have implemented retaliatory tariffs. In 
recent years, unwarranted regulatory and trade-distorting measures have 
hindered U.S. corn exports to some of these markets, making the 2017 
base year less representative of U.S. export levels.\5\ Moreover, 
products made from corn, such as distillers dried grains and solubles 
(DDGS) and ethanol have been adversely impacted by China's earlier 
decisions to unilaterally increase tariffs (ethanol) and impose anti-
dumping and countervailing duties (DDGS).\6\ Other products facing 
multi-year market access barriers include poultry, rice, and wheat.
---------------------------------------------------------------------------
    \5\ See the USTR Foreign Trade Barriers Reports and the USTR Trade 
Policy Agenda and Annual Reports for more details. The most recent 
reports can be accessed at https://ustr.gov/about-us/policy-offices/
press-office/reports-and-publications/2019.
    \6\ Ibid.
---------------------------------------------------------------------------
2019 MFP Payments and Payment Rates for Non-Specialty Crops
    Given the timing of the 2019 Market Facilitation Program (MFP) 
during the crop year, USDA developed a single rate per acre in each 
county for MFP-eligible non-specialty crops, which include select 
nonspecialty commodities both directly and indirectly affected by the 
trade dispute, in order to minimize potential distortions.
    Payments to each producer are limited to:

   2018 Farm Service Agency-certified planted acres;

   2018 Farm Service Agency-certified prevented from planting 
        acres (of non-specialty crops); and

   2018 expiring Conservation Reserve Program acreage.

    The specific commodity rates that form the basis of the county rate 
are derived from the gross trade damage estimates. Commodity rates are 
set as the estimated trade damages divided by the average volume of 
production for 2015-17 reported by NASS.
    The county payment rates \7\ were based on historical fixed average 
area and yields as discussed below. The total potential payment amount 
for non-specialty crops is the eligible area multiplied by the 
nonspecialty county rate per acre. This total payment amount is subject 
to limitations further discussed under the ``Total MFP Payments'' 
heading, beginning on page 7 of the report.
---------------------------------------------------------------------------
    \7\ See https://www.farmers.gov/manage/mfp for rates by county.

                   Non-specialty crops commodity rates
------------------------------------------------------------------------
   Non-specialty crops        Commodity Rate               Units
------------------------------------------------------------------------
         Soybeans                     $2.05                      BU
           Cotton                     $0.26                      LB
          Sorghum                     $1.69                      BU
             Corn                     $0.14                      BU
            Wheat                     $0.41                      BU
             Rice                     $0.63                     CWT
          Peanuts                     $0.01                      LB
                 Lentils              $3.99                     CWT
             Peas                     $0.85                     CWT
      Alfalfa Hay                     $2.81                    TONS
      Dried Beans                     $8.22                     CWT
        Chickpeas                     $1.48                     CWT
------------------------------------------------------------------------

Example of non-specialty crop county rate calculation
    County A has planted an average of 20,000 acres of corn, 10,000 
acres of soybeans, and 1,000 acres of barley. The historical average 
county yield is 180 bu/acre for corn, 60 bu/acre for soybeans, and 50 
bu/acre for barley. The commodity rates under the 2019 MFP for corn and 
soybeans are $0.14/bu and $2.05/bu, respectively. Since there are no 
retaliatory tariffs on U.S. barley, the payment rate for barley is 
$0.00/bu.
    County A's payment rate is calculated as follows:

          Step 1: For each crop in a county, multiply fixed historical 
        acres, fixed historical yields, and the payment rate per unit 
        for each eligible non-specialty MFP crop

       County A Corn Damage: 20,000 acres  180 bu/acre  
            $0.14/bu = $504,000

       County A Soybeans Damage: 10,000 acres  60 bu/acre  
            $2.05/bu =
               $1,230,000

       County A Barley Damage: 1,000 acres  50 bu/acre  
            $0.00/bu = $0

          Step 2: Sum all calculated values from Step 1

       $504,000 + $1,230,000 + $0 = $1,734,000 in total non-
            specialty crop damage

          Step 3: Sum the acres across all eligible non-specialty MFP 
        crops

       20,000 + 10,000 + 1,000 = 31,000 acres

          Step 4: Calculate the county payment rate per acre by 
        dividing the result of Step 2 by the result of Step 3

       $1,734,000/31,000 = $56/acre non-specialty crop county 
            payment

    Acres reported to the Farm Service Agency between 2015-2018 are 
used to calculate the historical fixed acres for each crop within a 
county. The 2015-2017 historical fixed county yield is calculated using 
the following cascade:

  1.  RMA county yield,

  2.  NASS county yield, if the RMA county yield is unavailable,

  3.  RMA T-yield, if the both the RMA county yield and NASS county 
            yield are unavailable,

  4.  NASS state yield, if (1)-(3) are unavailable, and

  5.  NASS national yield, if (1)-(4) are unavailable.
Prevent Plant
    2019 planting was characterized by substantial rainfall and cool 
weather that delayed planting of crops across the United States. 
Producers prevented from planting a 2019 non-specialty crop, but who 
planted a CCC-approved cover crop, with the potential to be harvested, 
qualify for a $15 per acre payment.\8\
---------------------------------------------------------------------------
    \8\ https://www.usda.gov/media/press-releases/2019/07/25/usda-
announces-details-support-package-farmers. USDA is not legally 
authorized to make Market Facilitation Program payments to producers 
for acreage that is not planted. However, cover crops planed with the 
purpose
---------------------------------------------------------------------------
Cups and Caps
    The county payment rates per acre are cupped and capped at $15 per 
acre and $150 per acre, respectively.
2019 MFP Payments and Payment Rates for Hogs and Milk
    Hogs: 2019 MFP payments for hog producers are based on live hog 
inventory on a day selected by the applicant between April 1, 2019 and 
May 15, 2019. Eligibility for 2019 MFP payments is again based upon 
independent ownership of the hogs; persons/legal entities that are 
contracted to grow hogs are not eligible for 2019 MFP.

    Calculate the per unit payment rate for hogs:

          Step 1: Calculate the gross trade damage estimate
          Step 2: Subtract the FPDP purchase amount from the gross 
        trade damage estimate to calculate the portion not covered by 
        FPDP
          Step 3: Divide the value from Step 2 by the number of hogs 
        reported in the 2019 March inventory report to calculate the 
        MFP payment rate per hog

    Milk: 2019 MFP payments for dairy producers are based on historical 
production, the same as what was reported for participation in the USDA 
Dairy Margin Coverage Program or its predecessor, the Margin Protection 
Program for Dairy. The ownership share for milk will be as reported to 
FSA for the aforementioned programs for dairy operations that were in 
business as of June 1, 2019. Dairy operations that were not in business 
as of June 1, 2019, are ineligible for MFP.

    Calculate the per unit payment rate for milk:

          Step 1: Calculate the gross trade damage estimate
          Step 2: Subtract the FPDP purchase amount from the gross 
        trade damage estimate to calculate the portion not covered by 
        FPDP
          Step 3: Divide the value from Step 2 by 2017 MPP production 
        to get the MFP payment rate per cwt of milk

                         Hog and Milk MFP Rates
------------------------------------------------------------------------
                 Trade Damage      Units       Production     MFP rate
                   estimate   ------------------------------------------
                 minus FPDP2
                   targeted
    Product        purchase
                    amount         units       (in million     $/units
               ---------------                   units)
                 (in million
                      $)
------------------------------------------------------------------------
        Hogs            $831           head             74           $11
       Dairy            $354            cwt          1,761         $0.20
------------------------------------------------------------------------

2019 MFP Payments and Payment Rates for Specialty Crops
    Similar to the 2018 MFP, producers of an expanded list of specialty 
crops will be eligible for program payments. 2019 MFP payments for 
specialty crops are based on 2019 acres of fruit or nut bearing plants. 
For specialty fruits and ginseng, the payment rate is multiplied by the 
average yields listed on https://www.farmers.gov/manage/mfp.

    Calculate the payment rate for specialty tree nuts:

          Step 1: Calculate and sum all gross trade damage estimates 
        for all specialty tree nuts
          Step 2: Sum bearing acres for all eligible tree nuts using 
        NASS Census data for 2017
          Step 3: Divide total gross trade damages from Step 1 by total 
        acres from Step 2 to get the national tree nut rate ($/acre)

    Calculate the payment rate for specialty fruits:

          Step 1: For each specialty fruit, calculate the gross trade 
        damage estimate
          Step 2: Calculate total production of the fruit crop using 
        2017 Census acreage and RMA yields
          Step 3: Divide the trade damage estimate from Step 1 by 
        average production from Step 2 to get the per unit payment rate 
        ($/lb)

    Calculate the payment rate for ginseng:

          Step 1: Calculate the gross trade damage estimate
          Step 2: Calculate estimated ginseng production using 2017 
        Census data on ginseng acreage and USDA estimate of average 
        yields using industry and academic sources
          Step 3: Divide the trade damage estimate from Step 1 by 
        estimated production from Step 2 to get the per unit payment 
        rate ($/lb)

                        Specialty Crop MFP Rates
------------------------------------------------------------------------
                                     Trade Damage
       Specialty Products            Estimate (in          MFP Rates
                                      million $)
------------------------------------------------------------------------
                Tree Nuts *                  $318           $146/acre
     Sweet Cherries (fresh)                  $111            $0.17/lb
             Grapes (fresh)                   $70            $0.03/lb
                Cranberries                   $28            $0.03/lb
                    Ginseng                    $6            $2.85/lb
------------------------------------------------------------------------
* Pistachios, almonds, walnuts, pecans, hazelnuts, and macadamia nuts.

Total MFP Payments
    The total payments to producers are subject to payment limitations, 
AGI eligibility criteria, and adjustments to the payment structure.
    2019 MFP payments will be provided in up to 3 installments. The 
first payment will be guaranteed, and is the higher of 50 percent of 
the total calculated payment or $15 per acre. If CCC determines that a 
second payment is warranted, it will be up to 75 percent of the total 
calculated payment less the amount received in the first payment and 
the second payment period will begin in November 2019. If CCC 
determines that a final payment is warranted, it will be for the 
remaining amount of the total calculated payment, unless otherwise 
adjusted by CCC, and the last payment period will begin in January 
2020.
    For 2019 MFP payments, there will be 3 separate payment limitations 
for each person or legal entity: \9\
---------------------------------------------------------------------------
    \9\ This excludes a joint venture or general partnership, as 
defined and determined under 7 CFR part 1400.

---------------------------------------------------------------------------
  1.  $250,000 for eligible non-specialty crops;

  2.  $250,000 for eligible specialty crops; and

  3.  $250,000 for hogs and milk.

  4.  No person or legal entity can receive more than $500,000 under 
            2019 MFP.

    Lastly, if the average adjusted gross income of a person or legal 
entity is greater than $900,000, the person or entity is not eligible 
to receive a MFP payment unless at least 75 percent of the adjusted 
gross income of the person or entity is derived from farming, ranching, 
or forestry related activities. The relevant years used to calculate 
average AGI are the 3 consecutive tax years immediately preceding the 
year before the payment year, which will be the crop year, or the 
marketing year for livestock or dairy. For example, for 2019 the 
relevant years to calculate AGI are the 2015, 2016 and 2017 tax years.
    For more information on the MFP program, please go to https://
www.farmers.gov/manage/mfp. Rulemaking and related documents, including 
the Cost-Benefit Analysis (CBA), for trade mitigation programs can be 
found at https://www.regulations.gov/docket?D=CCC-2019-0003.
                             [attachment 2]
                             
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Agricultural Provisions of The U.S.-China Economic and Trade Agreement 
        and USDA Trade Forecasts
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
U.S. Department of Agriculture, Office of the Chief Economist
February 6, 2020
Executive Summary
    This paper provides an overview of the agricultural provisions of 
the U.S.-China Economic and Trade Agreement (Agreement) and discusses 
how those provisions will be reflected in upcoming USDA commodity trade 
forecasts. USDA publishes trade forecasts for U.S. and global commodity 
markets as part of the Department's broader commodity supply and demand 
estimates. Consistent with past practice, USDA supply and demand 
forecasts reflect trade and other policies in effect at the time of the 
release of the forecast. The Agreement was signed on January 15, 2020 
and will enter into force no later than February 14, 2020. The 
agricultural provisions of the Agreement include commitments by China 
to enact specific economic and regulatory reforms to facilitate 
agricultural trade, as well as commitments for China to purchase 
specific values of U.S. agricultural, food, and seafood products in 
calendar years (January-December) 2020 and 2021. The Agreement includes 
provisions that China will make such purchases on a commercial basis at 
market prices and that the purchases may reflect seasonal marketing 
patterns.
    Publicly available information and data pertaining to the Agreement 
will be reflected in USDA's World Agricultural Supply and Demand 
Estimates (WASDE) report beginning in February 2020 and will also be 
reflected in subsequent and related reports such as the Outlook for 
U.S. Agricultural Trade. It is important to note key differences 
between the scope of the Agreement and USDA forecasts. USDA forecasts 
only cover a subset of the commodities subject to the Agreement's 
purchase commitments, and those commitments are expressed in value 
terms on a calendar year basis. The WASDE forecasts report global trade 
volumes on a marketing year basis, but do not report bilateral trade 
(volumes or values) between individual countries.
    Moreover, while the Agreement may contain specific purchase 
commitments for individual commodities, the Office of the U.S. Trade 
Representative (USTR) has not released that information publicly, and 
it therefore plays no direct role in USDA's market analysis and 
forecasts. As actual export sales accrue over time and market 
conditions evolve, USDA's trade forecasts will be updated to reflect 
the timing and composition of China's purchases of U.S. agricultural 
products throughout the relevant marketing (or fiscal) year. However, 
USDA's trade forecasts are part of a broader estimation of supply and 
demand for major commodities, and therefore reflect analysis of a wide 
range of economic and market variables that affect prices, planting, 
yields, production, inventories, stocks, and use for specific 
commodities and sectors in the United States and in other countries.
USDA Trade Forecasts
    USDA forecasts on a monthly, quarterly and yearly basis for U.S. 
and global commodity markets as part of the Department's broader 
commodity supply and demand estimates. The World Agricultural Supply 
and Demand Estimates (WASDE (https://www.usda.gov/oce/commodity/wasde/
wasde0120.pdf)) report is published monthly and provides official USDA 
forecasts for U.S. and global supply and demand for major crops (wheat, 
rice, coarse grains, oilseeds, and cotton), U.S. and Mexican sugar 
supply and demand, and U.S. livestock, poultry, and dairy supply and 
demand.\1\ These forecasts are reported on a marketing year basis.\2\ 
The trade forecasts are reported on a global basis, meaning that the 
WASDE reports total U.S. exports of a specific commodity to the world, 
or total Chinese imports of a specific commodity from the world. It 
does not report bilateral trade.
---------------------------------------------------------------------------
    \1\ The WASDE is one of USDA's Principal Federal Economic 
Indicators (https://www.whitehouse.gov/wp-content/uploads/2019/09/
pfei_schedule_release_dates_2020.pdf).
    \2\ Marketing years vary by commodity and country, but generally 
reflect the 12 month period in which a commodity is produced and 
marketed. In the case of livestock, production occurs continuously, so 
estimates and forecasts are reported on a calendar year basis.
---------------------------------------------------------------------------
    Other USDA reports related to the WASDE include the Foreign 
Agricultural Service (FAS) World Agricultural Production reports, FAS 
World Markets and Trade reports, and the Economic Research Service 
(ERS) Situation and Outlook reports. The FAS World Markets and Trade 
reports and ERS Situation and Outlook reports cover a broader scope of 
commodities (e.g., citrus, tree nuts, fresh deciduous fruit) and are 
published monthly or semi-regularly.\3\
---------------------------------------------------------------------------
    \3\ The FAS World Agricultural Production Report is released the 
same day as the WASDE and is also a Principal Federal Economic 
Indicator. The FAS World Market and Trade reports are also published on 
the same day as the WASDE, while ERS Situation and Outlook reports are 
generally published a few days after. Some reports are published 
monthly (grains, oilseeds, sweeteners, and livestock), while others are 
semi-regular (tree nuts, fruits, vegetables, cotton). See https://
apps.fas.usda.gov/psdonline/app/index.html#/app/downloads for a list of 
release dates for 2020 for FAS reports and https://www.ers.usda.gov/
calendar/ for the publication schedule for ERS 2020 Situation and 
Outlook reports.
---------------------------------------------------------------------------
    The Outlook for U.S. Agricultural Trade (https://www.ers.usda.gov/
publications/pub-details/?pubid=95473) provides quarterly USDA 
forecasts for agricultural trade (exports and imports) on a fiscal year 
(FY) basis (October 1 to September 30). Each quarterly report is based 
on the most recent WASDE report (February, May, August, November). This 
report includes forecasts for U.S. agricultural exports and imports by 
commodity on a value basis, and on volume terms for certain 
commodities. The report also includes forecasts for U.S. total 
agricultural exports to specific regions and countries, as well as 
total U.S. agricultural imports from primary suppliers, in value terms. 
This report does not provide specific bilateral commodity trade between 
the United States and its trading partners (e.g., U.S. soybean exports 
to China).
    The USDA Long-Term Agricultural Projections (https://www.usda.gov/
oce/commodity/projections/index.htm) report is released annually, 
generally in February.\4\ These projections are a departmental 
consensus on a long-run representative scenario for the agricultural 
sector for the next decade. Projections cover production, trade, and 
aggregate indicators such as farm income. The October WASDE is the 
starting point for these long-term projections, which are also reported 
on a marketing year basis, while the long-term forecast for U.S. 
agricultural trade in value terms is on a fiscal year basis. As with 
the WASDE, the long-term agricultural trade projections are for global, 
not bilateral trade.
---------------------------------------------------------------------------
    \4\ Early release tables on U.S. commodity projections and 
assumptions on U.S. macroeconomic growth, global real GDP growth, and 
global population growth are generally made public in November in the 
year prior to the release of the full report.
---------------------------------------------------------------------------
    The USDA WASDE and long-term baseline trade forecasts are developed 
through an intradepartmental process that is chaired by the World 
Agricultural Outlook Board (WAOB), and reflects input from several USDA 
agencies, including FAS, ERS, National Agricultural Statistics Service 
(NASS), Agricultural Marketing Service (AMS), and the Farm Service 
Agency (FSA).\5\ ERS and FAS coordinate the U.S. Agricultural Trade 
Outlook, which is approved by the WAOB.
---------------------------------------------------------------------------
    \5\ The long-term baseline projection analysis also reflects input 
from the Office of the Chief Economist (OCE), the Office of Budget and 
Program Analysis (OBPA), the Risk Management Agency (RMA), the Natural 
Resources Conservation Service (NRCS), and the National Institute for 
Food and Agriculture (NIFA). ERS has the lead role in preparing the 
USDA long-term projections report.
---------------------------------------------------------------------------
How USDA Trade Projections are Developed
    USDA agricultural trade analyses and forecasts are based on a range 
of trade data, market, and policy information including reporting by 
FAS overseas offices through the Global Agricultural Information 
Network (GAIN) reports on key commodities and policy developments for 
their country or region.\6\ U.S. trade data from the U.S. Census, as 
well as official trade data published by other countries, are also 
analyzed. FAS Export Sales Reporting (ESR) and other USDA trade-related 
data are also utilized.\7\ Trade forecasts contained in the WASDE and 
USDA's Production, Supply and Distribution Database (PSD) are part of 
the forecast of supply and demand for a specific commodity.\8\ Those 
commodity balances include separate estimates for supply (beginning 
stocks, imports, and production) and demand (domestic use, exports, and 
ending stocks). A wide range of market information and data inform 
these commodity supply and demand estimates. The Outlook for U.S. 
Agricultural Trade, which is based on the most recent WASDE, forecasts 
U.S. agricultural exports and imports but covers a broader range of 
commodities than WASDE and PSD (see table on p. 7 below for more detail 
on commodity coverage).
---------------------------------------------------------------------------
    \6\ See https://gain.fas.usda.gov/#/.
    \7\ See https://apps.fas.usda.gov/esrquery/ for Export Sales 
Reports. Other sources of data include inspections for export of 
certain grains and oilseeds that the Federal Grain Inspection Service 
publishes. See https://www.ams.usda.gov/resources/fgis-data-and-
statistics.
    \8\ See https://apps.fas.usda.gov/psdonline/app/index.html#/app/
home.
---------------------------------------------------------------------------
    The established practice for incorporating policy variables into 
USDA market forecasts is to include in the analysis all policies that 
are in place at the time the forecast. Further, until a formal end date 
is specified, the policy continues to be incorporated into the analysis 
throughout the time period covered by those forecasts. The long-term 
projections are based on specific assumptions about macroeconomic 
conditions, policy, weather, and international developments, with no 
domestic or external shocks to global agricultural markets. The 
projections contained in the forthcoming February 2020 long-term 
baseline report are based on analysis that was prepared during August 
through October 2019.
    On December 13, 2019, USTR announced that the United States and 
China had reached agreement on a trade deal, under which China 
committed to implement certain economic and structural reforms and make 
additional purchases of U.S. goods and services. That Agreement 
(https://ustr.gov/sites/default/files/files/agreements/
phase%20one%20agreement/Economic_And_Trade_Agreement_Between_The_
United_States_And_China_Text.pdf) was signed on January 15, 2020 and 
enters into force no later than 30 days after signature (February 14, 
2020).
    USTR released a series of fact sheets (https://ustr.gov/countries-
regions/china-mongolia-taiwan/peoples-republic-china/phase-one-trade-
agreement/fact-sheets) that summarize the Agreement. Key agricultural 
provisions include:

   Reforms to China's regulatory process for evaluating and 
        authorizing certain products of agricultural biotechnology.

   Compliance with World Trade Organization (WTO) obligations 
        on tariff-rate quotas (TRQs) for wheat, corn, and rice, 
        including specific improvements to TRQ administration.

   Commitment that food safety regulations are science- and 
        risk-based and only applied to the extent necessary to protect 
        human life or health.

   Established timeframes for regulatory actions to facilitate 
        trade for a broad range of products, including meat and 
        poultry, dairy, seafood, fruits and vegetables, animal feed 
        ingredients and pet foods.

   Stronger protection for intellectual property, including for 
        agriculture, and a commitment to ensure that requests for 
        geographical indication protection as part of international 
        agreements do not undermine market access for U.S. exports to 
        China.

    In addition, China committed to purchase and import, on average, 
$40 billion annually of U.S. food, agricultural, and seafood products, 
for a total of at least $80 billion over the next two years. The 
Agreement also provides that China will ``strive'' to import an 
additional $5 billion per year over the next two years. The Agreement 
recognizes that such purchases will be made at market prices based on 
commercial considerations, and that market conditions may determine the 
timing for which agricultural purchases are made in a given year.
    The purchase commitments cover the calendar years (January-
December) for 2020 and 2021. For agricultural products identified in 
Annex 6.1 to the Agreement, which is reproduced at the end of this 
report, China committed to purchase and import:

   No less than $12.5 billion above the 2017 baseline amount in 
        calendar year 2020 ($17.5 billion if the extra $5 billion is 
        achieved), and

   No less than $19.5 billion above the 2017 baseline amount in 
        calendar year 2021 ($24.5 billion if the extra $5 billion is 
        achieved).

    The Agreement does not identify the 2017 baseline amount, nor does 
it expressly address China's existing retaliatory tariffs that are 
currently in place on U.S. exports. The United States and China will 
use official Chinese and U.S. trade data to determine whether the 
purchase commitments by China have been met. As of the date of 
publication, China had not publicly announced any actions to reduce or 
eliminate retaliatory tariffs on U.S. agricultural products to be 
purchased pursuant to the Agreement. In December 2019, the Chinese 
Finance Ministry announced that some Chinese companies would be 
permitted to import U.S. soybeans, pork, and other agricultural goods 
and the retaliatory tariff would be waived.\9\ To what extent the 
Chinese government will take similar actions for the 2020 and 2021 
purchases under the Agreement is not yet clear, but is being closely 
monitored.
---------------------------------------------------------------------------
    \9\ ``China reduces ag tariffs,'' DTN, December 6, 2019, accessed 
on January 22 at https://www.dtnpf.com/agriculture/web/ag/news/article/
2019/12/06/chinese-officials-agree-waive-pork.
---------------------------------------------------------------------------
    Beyond December 2021, there are no specific purchase levels. 
However, the Agreement provides that the two sides ``project that the 
trajectory of increases'' in the commodities imported into China will 
continue in calendar years 2022 through 2025. The Agreement also 
provides that the United States and China shall specify increases in 
purchase for the subcategories listed in Annex 6.1 as appropriate. The 
agriculture subcategories listed in Annex 6.1 are: oilseeds, meat, 
cereals, cotton, other agricultural commodities, and seafood.\10\ The 
attachment to Annex 6.1 includes the Harmonized System (HS) trade codes 
for each subcategory and is reproduced at the end of this report. 
However, to date, USTR has not released any information publicly on 
specific purchase commitments for each subcategory.\11\
---------------------------------------------------------------------------
    \10\ According to footnote c to the table in Annex 6.1, other 
agricultural products ``[i]ncludes all other agricultural products, 
including alfalfa, citrus, dairy, dietary supplements, distilled 
spirits, dried distiller grains, essential oils, ethanol, fresh baby 
carrots, fruits and vegetables, ginseng, pet food, processed foods, 
tree nuts, and wine.'' Footnote d indicates that seafood includes 
lobster.
    \11\ The U.S. Trade Representative and senior USTR officials have 
stated that the Agreement includes specific commodity purchase 
commitments that will not be made public. See Ambassador Greg Doud's 
response to the second question in https://www.agweek.com/opinion/
columns/4696669-ustrs-ag-negotiator-shares-more-trade-deal-china: ``It 
has to be an economic purchase, obviously, but this is a commitment 
overall in agriculture. Are there specific commitments for specific 
commodities within that? The answer is yes, but those numbers will not 
be made public.''
---------------------------------------------------------------------------
How will the U.S.-China Economic and Trade Agreement be Incorporated 
        into USDA Trade Forecasts?
    As previously explained, USDA commodity forecasts consider those 
trade actions which are in place or have had formal announcement of 
effective dates as of the time of publication. For the Agreement, the 
annual aggregate purchase levels in value terms, and which agricultural 
commodities are covered, is known for calendar years 2020 and 2021, and 
the Agreement states that China's purchases will be made at market 
prices based on commercial considerations, taking into account seasonal 
marketing patterns. What is not known is whether retaliatory tariffs 
will apply to those purchases or the timing of those purchases in a 
given calendar year. Moreover, commodity-specific commitments are not 
publicly available and are therefore not considered in the published 
forecasts.
    USDA trade forecasts prior to February 2020 do not reflect the 
specific provisions of the Agreement with China, since the details of 
the Agreement were not known until after the January WASDE was 
released. However, over past months, WASDE forecasts have routinely 
been updated to reflect trade and market conditions, including actual 
and anticipated sales to China. Beginning in February 2020, USDA trade 
projections for 2019/20 (and FY 2020) will fully consider all publicly 
available information on the Agreement, as well as any new market or 
policy developments that would affect those forecasts.\12\
---------------------------------------------------------------------------
    \12\ The long-term projections will not be revised prior to 
publication in February and will not reflect the Agreement.
---------------------------------------------------------------------------
    USDA releases an initial set of supply and demand forecasts for the 
upcoming crop year (e.g., 2020/21) at the annual USDA Agricultural 
Outlook Forum. These forecasts cover the major crop commodities and are 
based on several assumptions including ``normal'' weather, trend 
yields, and no change to agricultural and trade policies throughout the 
forecast period. The first official commodity supply and demand 
forecasts for the upcoming crop year are released with the May WASDE, 
which incorporates the latest market developments along with acreage 
forecasts based on the USDA/NASS Prospective Planting survey. Both the 
initial forecasts released in February and the official May WASDE 2020/
21 forecasts will incorporate the Agreement into the underlying 
analysis, along with all other relevant market and policy variables. As 
more information and data become available regarding the timing, volume 
and content of China's commodity purchases, USDA commodity forecasts 
will be updated to reflect that new information.
    It is important to contrast the Agreement's agricultural purchase 
provisions with how USDA forecasts agricultural trade (see table 
below). First, the Agreement's definition of agricultural products in 
Annex 6.1 is much broader than the scope of commodities covered by the 
WASDE and PSD data. While the U.S. Agricultural Trade Outlook forecast 
covers more products than WASDE and PSD, the Agreement includes certain 
product groups, such as fish, seafood, spirits, biofuels, and tobacco 
products, which are not included in the USDA definition of agricultural 
products.\13\ Second, WASDE and PSD trade forecasts are reported on a 
volume basis (e.g., metric tons), while the U.S. agricultural trade 
outlook forecast is based on values, although volumes are included for 
some commodities.
---------------------------------------------------------------------------
    \13\ USDA defines distilled spirits, ethanol, biodiesel, forest 
products and fish products as ``agricultural-related'' products and are 
not included in the USDA FY trade forecast. The Agreement includes 
distilled spirits, ethanol, and fish products in the agricultural 
purchase category.
---------------------------------------------------------------------------
    Third, WASDE and PSD trade forecasts reflect global trade, that is, 
total U.S. soybean exports to all markets, not just to China (or total 
Chinese imports of soybeans from all suppliers). While U.S. soybean 
exports to China are a component of the U.S. soybean export forecast, 
the forecast must also account for U.S. soybean exports to other 
markets (or China's imports from other suppliers). Therefore, increased 
U.S. sales of any particular commodity to China is likely to shift 
global trade flows and lead to some rebalancing of markets, including 
the possibility of reduced sales to China of that commodity by other 
countries, and/or reduced U.S. exports of the commodity to non-China 
markets. These bilateral trade shifts are generally not visible in data 
reported in terms of global trade. The U.S. agricultural trade outlook 
includes U.S. bilateral export forecasts on a value basis, but only for 
the total value of agricultural commodities listed in the table below, 
which excludes certain products that are covered by the Agreement.
    Lastly, WASDE and PSD forecasts are on a marketing year basis, 
which is a 12 month period over which a crop is first harvested, and 
then sold prior to the next year's harvest (e.g., 2019/20).\14\ For 
example, the marketing year for U.S. soybeans is September to August, 
while the marketing year for U.S. cotton exports is August to July and 
for U.S. wheat is June to May. The U.S. agricultural trade forecast is 
on a fiscal year (October to September) basis. Given the seasonality of 
marketing patterns, which is recognized in the Agreement, China's 
purchases will likely be captured over multiple forecast years, 
depending on the commodity.
---------------------------------------------------------------------------
    \14\ Livestock, poultry, and dairy products are reported on a 
calendar year basis.

                              Summary Table
------------------------------------------------------------------------
                                                            U.S.-China
                                               U.S. Ag     Economic and
                     WASDE         PSD          Trade          Trade
                                               Outlook       Agreement
------------------------------------------------------------------------
Commodities/
 regions covered
                  U.S. and
 
 
 
                               Same as
                                            Same as PSD
                                                          Same as USDA
 
------------------------------------------------------------------------
Basis (volume or  Volume       Volume       Value for     Value
 value)                                      all
                                             commodities
                                             , volume
                                             for certain
                                             commodities
------------------------------------------------------------------------
Global or         Global       Global       U.S. global   China's
 bilateral trade   trade        trade        trade by      imports of
                                             commodity;    U.S.
                                             U.S.          agricultural
                                             bilateral     products
                                             trade for
                                             total
                                             agricultura
                                             l and food
                                             products
------------------------------------------------------------------------
Time frame/most   Marketing    Marketing    Fiscal year   2020 and 2021
 recent forecast   years        years        (FY 2020)     calendar
                   (2019/20)    (2019/20)                  years
------------------------------------------------------------------------
Reporting         Monthly      Monthly for  Quarterly     Not applicable
 frequency                      some         (February,
                                commoditie   May,
                                s, semi-     August,
                                regular      November)
                                for others
------------------------------------------------------------------------


   Table: Attachment to Annex 6.2 of the U.S.-China Economic and Trade
                                Agreement
------------------------------------------------------------------------
 
------------------------------------------------------------------------
            2.                               Agriculture
------------------------------------------------------------------------
9                                             Oilseeds
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        1201   Soybeans, whether or not
                                                broken
------------------------------------------------------------------------
10                                              Meat
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        0201   Meat of bovine animals,
                                                fresh or chilled
                                        0202   Meat of bovine animals,
                                                frozen
                                        0203   Meat of swine, fresh,
                                                chilled, or frozen
                                        0204   Meat of sheep or goats,
                                                fresh, chilled or frozen
                                        0206   Edible offal of bovine
                                                animals, swine, sheep,
                                                goats, horses, asses,
                                                mules or hinnies, fresh,
                                                chilled or frozen
                                        0207   Meat and edible offal, of
                                                the poultry of heading
                                                0105, fresh, chilled or
                                                frozen
                                        0208   Other meat and edible
                                                meat offal, fresh,
                                                chilled or frozen
                                        0209   Pig fat, free of lean
                                                meat, and poultry fat,
                                                not rendered or
                                                otherwise extracted,
                                                fresh, chilled, frozen,
                                                salted, in brine, dried
                                                or smoked
                                        0210   Meat and edible meat
                                                offal, salted, in brine,
                                                dried or smoked; edible
                                                flours and meals of meat
                                                or meat offal
                                        1601   Sausages and similar
                                                products, of meat, meat
                                                offal or blood; food
                                                preparations based on
                                                these products
                                        1602   Other prepared or
                                                preserved meat, meat
                                                offal or blood
                                        1603   Extracts and juices of
                                                meat (not related to
                                                fish or crustaceans,
                                                molluscs or other
                                                aquatic invertebrates)
------------------------------------------------------------------------
11                                             Cereals
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        1001   Wheat and meslin
                                        1003   Barley
                                        1004   Oats
                                        1005   Corn (maize)
                                        1006   Rice
                                        1007   Grain sorghum
                                        1008   Buckwheat, millet and
                                                canary seeds; other
                                                cereals (including wild
                                                rice)
                                        1101   Wheat or meslin flour
                                        1102   Cereal flours other than
                                                of wheat or meslin
                                        1103   Cereal groats, meal and
                                                pellets
                                        1104   Cereal grains, otherwise
                                                worked (hulled, rolled
                                                etc.), except rice
                                                (heading 1006); germ of
                                                cereals, whole, rolled,
                                                flaked or ground
                                        1105   Flour, meal flakes,
                                                granules and pellets of
                                                potatoes
                                        1106   Flour and meal of dried
                                                leguminous vegetables
                                                (hd. 0713), of sago or
                                                roots etc. (hd. 0714);
                                                flour, meal and powder
                                                of fruit and nuts etc.
                                                (ch. 8)
                                        1107   Malt, whether or not
                                                roasted
                                        1108   Starches; inulin
                                        1109   Wheat gluten, whether or
                                                not dried
------------------------------------------------------------------------
12                                             Cotton
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        5201   Cotton, not carded or
                                                combed
                                        5202   Cotton waste (including
                                                yarn waste and garnetted
                                                stock)
                                        5203   Cotton, carded or combed
------------------------------------------------------------------------
13                                 Other agricultural commodities
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        0101   Horses, asses, mules and
                                                hinnies, live
                                        0102   Bovine animals, live
                                        0103   Swine, live
                                        0104   Sheep and goats, live
                                        0105   Poultry, live; chickens,
                                                ducks, geese, turkeys
                                                and guineas
                                        0106   Animals, live, nesoi
                                        0205   Meat of horses, asses,
                                                mules or hinnies, fresh,
                                                chilled or frozen
                                        0401   Milk and cream, not
                                                concentrated nor
                                                containing added
                                                sweetening
                                        0402   Milk and cream,
                                                concentrated or
                                                containing added
                                                sweetening
                                        0403   Buttermilk, curdled milk
                                                and cream, yogurt,
                                                kephir etc., whether or
                                                not flavored etc. or
                                                containing added fruit
                                                or cocoa
                                        0404   Whey and other products
                                                consisting of natural
                                                milk constituents,
                                                whether or not
                                                concentrated or
                                                sweetened, nesoi
                                        0405   Butter and other fats and
                                                oils derived from milk
                                        0406   Cheese and curd
                                        0407   Birds' eggs, in shell,
                                                fresh, preserved or
                                                cooked
                                        0408   Birds' eggs, not in shell
                                                and egg yolks, fresh,
                                                dried, cooked by steam
                                                etc., molded, frozen or
                                                otherwise preserved,
                                                sweetened or not
                                        0409   Honey, natural
                                        0410   Edible products of animal
                                                origin, nesoi
                                        0501   Human hair, unworked,
                                                whether or not washed or
                                                scoured; waste of human
                                                hair
                                        0502   Pigs', hogs' or boars'
                                                bristles and hair;
                                                badger and other
                                                brushmaking hair; waste
                                                of such bristles or hair
                           ---------------------------------------------
                                        0504   Animal guts, bladders and
                                                stomachs (other than
                                                fish), whole and pieces
                                                thereof, fresh, chilled,
                                                frozen, salted, in
                                                brine, dried or smoked
                                        0505   Bird skins and other
                                                feathered parts of
                                                birds, feathers and
                                                parts of feathers and
                                                down, not further worked
                                                than cleaned etc.
                                        0506   Bones and horn--cores,
                                                unworked, defatted,
                                                simply prepared (not cut
                                                to shape), treated with
                                                acid etc.; powder and
                                                waste of these products
                                        0507   Ivory, tortoise--shell,
                                                whalebone and whalebone
                                                hair, horns, hooves,
                                                claws etc., unworked or
                                                simply prepared, not cut
                                                to shape
                                        0510   Ambergris, castoreum,
                                                civet and musk;
                                                cantharides; bile;
                                                glands and other animal
                                                products for use in
                                                pharmaceutical products,
                                                fresh, frozen, etc.
                                        0601   Bulbs, tubers, tuberous
                                                roots, corms etc.,
                                                dormant, in growth or in
                                                flower; chicory plants
                                                and roots for planting
                                        0602   Live plants nesoi
                                                (including their roots),
                                                cuttings and slips;
                                                mushroom spawn
                                        0603   Cut flowers and buds
                                                suitable for bouquets or
                                                ornamental purposes,
                                                fresh, dried, dyed,
                                                bleached, impregnated or
                                                otherwise prepared
                                        0604   Foliage, branches,
                                                grasses, mosses etc. (no
                                                flowers or buds), for
                                                bouquets or ornamental
                                                purposes, fresh, dried,
                                                dyed, bleached etc.
                                        0701   Potatoes (other than
                                                sweet potatoes), fresh
                                                or chilled
                                        0702   Tomatoes, fresh or
                                                chilled
                                        0703   Onions, shallots, garlic,
                                                leeks and other
                                                alliaceous vegetables,
                                                fresh or chilled
                                        0704   Cabbages, cauliflower,
                                                kohlrabi, kale and
                                                similar edible
                                                brassicas, fresh or
                                                chilled
                                        0705   Lettuce (lactuca sativa)
                                                and chicory (cichorium
                                                spp.), fresh or chilled
                                        0706   Carrots, turnips, salad
                                                beets, salsify, radishes
                                                and similar edible
                                                roots, fresh or chilled
                                        0707   Cucumbers and gherkins,
                                                fresh or chilled
                                        0708   Leguminous vegetables,
                                                shelled or unshelled,
                                                fresh or chilled
                                        0709   Vegetables nesoi, fresh
                                                or chilled
                                        0710   Vegetables (uncooked or
                                                cooked by steam or
                                                boiling water), frozen
                                        0711   Vegetables provisionally
                                                preserved (by sulfur
                                                dioxide gas, in brine
                                                etc.), but unsuitable in
                                                that state for immediate
                                                consumption
                                        0712   Vegetables, dried, whole,
                                                cut, sliced, broken or
                                                in powder, but not
                                                further prepared
                                        0713   Leguminous vegetables,
                                                dried shelled
                                        0714   Cassava (manioc),
                                                arrowroot, salep,
                                                jerusalem artichokes,
                                                sweet potatoes and
                                                similar roots etc. (high
                                                starch etc. content),
                                                fresh or dried; sago
                                                pith
                                        0801   Coconuts, brazil nuts and
                                                cashew nuts, fresh or
                                                dried
                                        0802   Nuts nesoi, fresh or
                                                dried
                                        0803   Bananas, including
                                                plantains, fresh or
                                                dried
                                        0804   Dates, figs, pineapples,
                                                avocados, guavas,
                                                mangoes and mangosteens,
                                                fresh or dried
                           ---------------------------------------------
                                        0805   Citrus fruit, fresh or
                                                dried
                                        0806   Grapes, fresh or dried
                                        0807   Melons (including
                                                watermelons) and papayas
                                                (papaws), fresh
                                        0808   Apples, pears and
                                                quinces, fresh
                                        0809   Apricots, cherries,
                                                peaches (including
                                                nectarines), plums
                                                (including prune plums)
                                                and sloes, fresh
                                        0810   Fruit nesoi, fresh
                                        0811   Fruit and nuts (uncooked
                                                or cooked by steam or
                                                boiling water), whether
                                                not sweetened, frozen
                                        0812   Fruit and nuts
                                                provisionally preserved
                                                (by sulfur dioxide gas,
                                                in brine etc.), but
                                                unsuitable in that state
                                                for immediate
                                                consumption
                                        0813   Fruit, dried, nesoi
                                                (other than those of
                                                headings 0801 to 0806);
                                                mixtures of nuts or
                                                dried fruits of this
                                                chapter
                                        0814   Peel of citrus fruit or
                                                melons (including
                                                watermelons), fresh,
                                                frozen, dried or
                                                provisionally preserved
                                        0901   Coffee, whether or not
                                                roasted or
                                                decaffeinated; coffee
                                                husks and skins; coffee
                                                substitutes containing
                                                coffee
                                        0902   Tea, whether or not
                                                flavored
                                        0903   Mate
                                        0904   Pepper of the genus
                                                piper; fruits of the
                                                genus capsicum (peppers)
                                                or of the genus pimenta,
                                                dried, crushed or ground
                                        0905   Vanilla
                                        0906   Cinnamon and cinnamon--
                                                tree flowers
                                        0907   Cloves (whole fruit,
                                                cloves and stems)
                                        0908   Nutmeg, mace and
                                                cardamons
                                        0909   Seeds of anise, badian,
                                                fennel, coriander, cumin
                                                or caraway; juniper
                                                berries
                                        0910   Ginger, saffron, tumeric
                                                (curcuma), thyme, bay
                                                leaves, curry and other
                                                spices
                                        1002   Rye
                                        1202   Peanuts (ground-nuts),
                                                not roasted or otherwise
                                                cooked, whether or not
                                                shelled or broken
                                        1203   Copra
                                        1204   Flaxseed (linseed),
                                                whether or not broken
                                        1205   Rape or colza seeds,
                                                whether or not broken
                                        1206   Sunflower seeds, whether
                                                or not broken
                                        1207   Oil seeds and oleaginous
                                                fruits nesoi, whether or
                                                not broken
                           ---------------------------------------------
                                        1208   Flours and meals of oil
                                                seeds or oleaginous
                                                fruits, other than those
                                                of mustard
                                        1209   Seeds, fruit and spores,
                                                of a kind used for
                                                sowing
                                        1210   Hop cones, fresh or
                                                dried, whether or not
                                                ground, powdered or in
                                                the form of pellets;
                                                lupulin
                                        1211   Plants and parts of
                                                plants (including seeds
                                                and fruits), used in
                                                perfumery, pharmacy, or
                                                for insecticidal or
                                                similar purposes, fresh
                                                or dried
                                        1212   Locust beans, seaweeds
                                                etc., sugar beet and
                                                sugar cane; fruit stones
                                                and kernels and other
                                                vegetable products used
                                                for human consumption,
                                                nesoi
                                        1213   Cereal straw and husks,
                                                unprepared, whether or
                                                not chopped, ground,
                                                pressed or in the form
                                                of pellets
                                        1214   Rutabagas (swedes),
                                                mangolds, hay, alfalfa
                                                (lucerne), clover,
                                                forage kale, lupines and
                                                similar forage products,
                                                whether or not in the
                                                form of pellets
                                        1301   Lac; natural gums,
                                                resins, gum--resins and
                                                balsams
                                        1302   Vegetable saps and
                                                extracts; pectic
                                                substances, pectinates
                                                and pectates; agar--agar
                                                and other mucilages and
                                                thickeners, derived from
                                                vegetable products
                                        1401   Vegetable materials used
                                                primarily for plaiting,
                                                including bamboos,
                                                rattans, reeds, rushes,
                                                osier, raffia, processed
                                                cereal straw and lime
                                                bark
                                        1404   Vegetable products, nesoi
                                        1501   Pig fat (including lard)
                                                and poultry fat, other
                                                than of heading 0209 or
                                                1503
                                        1502   Fats of bovine animals,
                                                sheep or goats, other
                                                than those of heading
                                                1503
                                        1503   Lard stearin, lard oil,
                                                oleostearin, oleo--oil
                                                and tallow oil, not
                                                emulsified or mixed or
                                                otherwise prepared
                                        1505   Wool grease and fatty
                                                substances derived
                                                therefrom, including
                                                lanolin
                                        1506   Animal fats and oils and
                                                their fractions, nesoi,
                                                whether or not refined,
                                                but not chemically
                                                modified
                                        1507   Soybean oil and its
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1508   Peanut (ground-nut) oil
                                                and its fractions,
                                                whether or not refined,
                                                but not chemically
                                                modified
                                        1509   Olive oil and its
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1510   Olive--residue oil and
                                                blends of olive oil and
                                                oil--residue oil, not
                                                chemically modified
                                        1511   Palm oil and its
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1512   Sunflower--seed,
                                                safflower or cottonseed
                                                oil, and their
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1513   Coconut (copra), palm
                                                kernel or babassu oil
                                                and their fractions,
                                                whether or not refined,
                                                but not chemically
                                                modified
                                        1514   Rapeseed, colza or
                                                mustard oil and their
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1515   Fixed vegetable fats and
                                                oils (including jojoba
                                                oil) and their
                                                fractions, whether or
                                                not refined, but not
                                                chemically modified
                                        1516   Animal or vegetable fats
                                                and oils and their
                                                fractions, partly or
                                                wholly hydrogenated
                                                etc., whether or not
                                                refined, but not further
                                                prepared
                           ---------------------------------------------
                                        1517   Margarine; edible
                                                mixtures or preparations
                                                of animal or vegetable
                                                fats or oils or of
                                                fractions of different
                                                specified fats and oils
                                        1518   Animal or vegetable fats,
                                                oils and their
                                                fractions, boiled,
                                                oxidized, etc.; inedible
                                                mixes or preparations of
                                                animal or vegetable fats
                                                and oils, nesoi
                                        1520   Glycerol (glycerine),
                                                whether or not pure;
                                                glycerol waters and
                                                glycerol lyes
                                        1521   Vegetable waxes (other
                                                than triglycerides),
                                                beeswax, other insect
                                                waxes and spermaceti,
                                                whether or not refined
                                                or colored
                                        1522   Degras; residues
                                                resulting from the
                                                treatment of fatty
                                                substances or animal or
                                                vegetable waxes
                                        1701   Cane or beet sugar and
                                                chemically pure sucrose,
                                                in solid form
                                        1702   Sugars nesoi, including
                                                chemically pure lactose,
                                                maltose, glucose and
                                                fructose in solid form;
                                                sugar syrups (plain);
                                                artificial honey;
                                                caramel
                                        1703   Molasses resulting from
                                                the extraction or
                                                refining of sugar
                                        1704   Sugar confectionary
                                                (including white
                                                chocolate), not
                                                containing cocoa
                                        1801   Cocoa beans, whole or
                                                broken, raw or roasted
                                        1802   Cocoa shells, husks,
                                                skins and other cocoa
                                                waste
                                        1803   Cocoa paste, whether or
                                                not defatted
                                        1804   Cocoa butter, fat and oil
                                        1805   Cocoa powder, not
                                                containing added sugar
                                                or other sweetening
                                                matter
                                        1806   Chocolate and other food
                                                preparations containing
                                                cocoa
                                        1901   Malt extract; food
                                                preparations of flour,
                                                meal etc. containing
                                                under 40% cocoa nesoi;
                                                food preparations of
                                                milk etc. containing
                                                under 50% cocoa nesoi
                                        1902   Pasta, whether or not
                                                cooked or stuffed or
                                                otherwise prepared,
                                                including spaghetti,
                                                lasagna, noodles etc.;
                                                couscous, whether or not
                                                prepared
                                        1903   Tapioca and substitutes
                                                therefor prepared from
                                                starch, in the form of
                                                flakes, grains, pearls,
                                                siftings or similar
                                                forms
                                        1904   Prepared foods from
                                                swelling or roasting
                                                cereals or products;
                                                cereals (excluding
                                                corn), in grain form
                                                flakes or worked grain
                                                prepared nesoi
                                        1905   Bread, pastry, cakes,
                                                biscuits and other
                                                bakers' wares; communion
                                                wafers, empty capsules
                                                for medicine etc.,
                                                sealing wafers, rice
                                                paper etc.
                                        2001   Vegetables, fruit, nuts
                                                and other edible parts
                                                of plants, prepared or
                                                preserved by vinegar or
                                                acetic acid
                                        2002   Tomatoes prepared or
                                                preserved otherwise than
                                                by vinegar or acetic
                                                acid
                                        2003   Mushrooms and truffles,
                                                prepared or preserved
                                                otherwise than by
                                                vinegar or acetic acid
                                        2004   Vegetables, other than
                                                tomatoes, mushrooms and
                                                truffles, prepared or
                                                preserved otherwise than
                                                by vinegar or acetic
                                                acid, frozen, excluding
                                                products of 2006
                                        2005   Vegetables, other than
                                                tomatoes, mushrooms and
                                                truffles, prepared or
                                                preserved otherwise than
                                                by vinegar or acetic
                                                acid, not frozen
                                                excluding products of
                                                2006
                                        2006   Vegetables, fruit, nuts,
                                                fruit--peel and other
                                                parts of plants
                                                preserved by sugar
                                                (drained, glace or
                                                crystallized)
                           ---------------------------------------------
                                        2007   Jams, fruit jellies,
                                                marmalades, fruit or nut
                                                puree and fruit or nut
                                                pastes, being cooked
                                                preparations, whether or
                                                not containing added
                                                sweetening
                                        2008   Fruit, nuts and other
                                                edible parts of plants,
                                                otherwise prepared or
                                                preserved, whether or
                                                not containing added
                                                sweetening or spirit,
                                                nesoi
                                        2009   Fruit juices not
                                                fortified with vitamins
                                                or minerals (including
                                                grape must) & vegetable
                                                juices, unfermented &
                                                not containing added
                                                spirit, whether or not
                                                containing added
                                                sweetening
                                        2101   Extracts, essences and
                                                concentrates of coffee,
                                                tea or mate and
                                                preparations thereof;
                                                roasted chicory etc. and
                                                its extracts, essences
                                                and concentrates
                                        2102   Yeasts; other single-cell
                                                micro-organisms, dead
                                                (other than medicinal
                                                vaccines of heading
                                                3002); prepared baking
                                                powders
                                        2103   Sauces and preparations
                                                therefor; mixed
                                                condiments and mixed
                                                seasonings; mustard
                                                flour and meal and
                                                prepared mustard
                                        2104   Soups and broths and
                                                preparations therefor;
                                                homogenized composite
                                                food preparations
                                        2105   Ice cream and other
                                                edible ice, whether or
                                                not containing cocoa
                                        2106   Food preparations not
                                                elsewhere specified or
                                                included
                                        2203   Beer made from malt
                                        2204   Wine of fresh grapes,
                                                including fortified
                                                wines; grape must other
                                                than that of heading
                                                2009
                                        2205   Vermouth and other wine
                                                of fresh grapes flavored
                                                with plants or aromatic
                                                substances
                                        2206   Other fermented beverages
                                                (for example, cider,
                                                perry, mead, sake);
                                                mixtures of fermented
                                                beverages and mixtures
                                                of fermented beverages
                                                and non-alcoholic
                                                beverages, not elsewhere
                                                specified or included
                                        2207   Undenatured ethyl alcohol
                                                of an alcoholic strength
                                                by volume of 80 percent
                                                vol. or higher; ethyl
                                                alcohol and other
                                                spirits, denatured, of
                                                any strength
                                        2208   Undenatured ethyl alcohol
                                                of an alcoholic strength
                                                by volume of less than
                                                80 percent vol.;
                                                spirits, liqueurs and
                                                other spirituous
                                                beverages
                                        2209   Vinegar and substitutes
                                                for vinegar obtained
                                                from acetic acid
                                        2301   Flours, meals and
                                                pellets, of meat or meat
                                                offal, of fish or of
                                                crustaceans, mollusks or
                                                other aquatic
                                                invertebrates, unfit for
                                                human consumption;
                                                greaves (cracklings)
                                        2302   Bran, sharps and other
                                                residues (in pellets or
                                                not), derived from the
                                                sifting, milling or
                                                other working of cereals
                                                or leguminous plants
                                        2303   Residues of starch
                                                manufacture and other
                                                residues and waste of
                                                sugar manufacture,
                                                brewing or distilling
                                                dregs and waste, whether
                                                or not in pellets
                                        2304   Soybean oilcake and other
                                                solid residues resulting
                                                from the extraction of
                                                soy bean oil, whether or
                                                not ground or in the
                                                form of pellets
                                        2305   Peanut (ground-nut)
                                                oilcake and other solid
                                                residues resulting from
                                                the extraction of peanut
                                                (ground-nut) oil,
                                                whether or not ground or
                                                in pellets
                                        2306   Oilcake and other solid
                                                residues (in pellets or
                                                not), resulting from the
                                                extraction of vegetable
                                                fats or oils (except
                                                from soybeans or
                                                peanuts), nesoi
                                        2307   Wine lees; argol
                                        2308   Vegetable materials and
                                                waste, vegetable
                                                residues and by-products
                                                (in pellets or not),
                                                used in animal feeding,
                                                nesoi
                                        2309   Preparations of a kind
                                                used in animal feeding
                                        2401   Tobacco, unmanufactured
                                                (whether or not threshed
                                                or similarly processed);
                                                tobacco refuse
                           ---------------------------------------------
                                        2402   Cigars, cheroots,
                                                cigarillos and
                                                cigarettes, of tobacco
                                                or of tobacco
                                                substitutes
                                        2403   Tobacco and tobacco
                                                substitute manufactures,
                                                nesoi; homogenized or
                                                reconstituted tobacco;
                                                tobacco extracts and
                                                essences
                               290543/290544   Acyclic alcohols and
                                                their halogenated,
                                                sulfonated, nitrated or
                                                nitrosated derivatives
                                        3301   Essential oils,
                                                concentrates and
                                                absolutes; resinoid;
                                                extracted oleoresins;
                                                concentrations of
                                                essential oils and
                                                terpenic byproducts;
                                                aqueous solutions etc.
                                                of essential oil
                                        3302   Mixtures of odoriferous
                                                substances and mixtures
                                                (including alcoholic
                                                solutions) with a basis
                                                of one or more of these
                                                substances, of a kind
                                                used as raw materials in
                                                industry; other
                                                preparations based on
                                                odoriferous substances,
                                                of a kind used for the
                                                manufacture of beverages
                                        3501   Casein, caseinates and
                                                other casein
                                                derivatives; casein
                                                glues
                                        3502   Albumins (including
                                                concentrates with two or
                                                more whey proteins,
                                                containing by weight
                                                more than 80% whey
                                                proteins calculated on
                                                dry matter), albuminates
                                                & other albumin
                                                derivatives
                                        3503   Gelatin (including
                                                gelatin in rectangular
                                                or square sheets) and
                                                gelatin derivatives;
                                                isinglass; other glue of
                                                animal origin (except
                                                casein glue) nesoi
                                        3504   Peptones and derivatives;
                                                other proteins and
                                                derivatives, nesoi; hide
                                                powder, chromed or not
                                        3505   Dextrins and other
                                                modified starches; glues
                                                based on starches, or on
                                                dextrins or other
                                                modified starches
                                      380910   Finishing agents, dye
                                                carriers and other
                                                preparations (dressings,
                                                mordants etc.) used in
                                                the textile, paper,
                                                leather or like
                                                industries, nesoi
                                        4101   Raw hides and skins of
                                                bovine or equine animals
                                                (fresh or preserved, but
                                                not tanned or further
                                                prepared), whether or
                                                not dehaired or split
                                        4102   Raw skins of sheep or
                                                lambs, other than
                                                astrakhan, broadtail,
                                                caracul or similar skins
                                                (fresh or preserved, but
                                                not tanned or further
                                                prepared)
                                        4103   Raw hides and skins nesoi
                                                (fresh or preserved, but
                                                not tanned or further
                                                prepared), whether or
                                                not dehaired or split
                                        4301   Raw furskins nesoi (other
                                                than raw hides and skins
                                                usually used for
                                                leather), including
                                                heads, tails and pieces
                                                or cuttings suitable for
                                                furriers' use
                                        5001   Silkworm cocoons suitable
                                                for reeling
                                        5002   Raw silk (not thrown)
                                        5003   Silk waste (including
                                                cocoons unsuitable for
                                                reeling, yarn waste and
                                                garnetted stock)
                                        5101   Wool, not carded or
                                                combed
                                        5102   Fine or coarse animal
                                                hair, not carded or
                                                combed
                                        5103   Waste of wool or of fine
                                                or coarse animal hair,
                                                including yarn waste but
                                                excluding garnetted
                                                stock
                                        5301   Flax, raw or processed
                                                but not spun; flax tow
                                                and waste (including
                                                yarn waste and garnetted
                                                stock)
                                        5302   True hemp (cannabis
                                                sativa l.), raw or
                                                processed but not spun;
                                                tow and waste of true
                                                hemp (including yarn
                                                waste and garnetted
                                                stock)
------------------------------------------------------------------------
14                                             Seafood
                           ---------------------------------------------
                                 HS Code          Product Description
                           ---------------------------------------------
                                        0301   Live fish
                                        0302   Fish, fresh or chilled,
                                                excluding fish fillets
                                                and other fish meat of
                                                heading 0304
                           ---------------------------------------------
                                        0303   Fish, frozen, excluding
                                                fish fillets and other
                                                fish meat of heading
                                                0304
                                        0304   Fish fillets and other
                                                fish meat (whether or
                                                not minced), fresh,
                                                chilled or frozen
                                        0305   Fish, dried, salted or in
                                                brine; smoked fish,
                                                whether or not cooked
                                                before or during the
                                                smoking process; flours,
                                                meals and pellets of
                                                fish, fit for human
                                                consumption
                                        0306   Crustaceans, whether in
                                                shell or not, live,
                                                fresh, chilled, frozen,
                                                dried, salted or in
                                                brine; smoked
                                                crustaceans, whether in
                                                shell or not, whether or
                                                not cooked before or
                                                during the smoking
                                                process; crustaceans, in
                                                shell, cooked by
                                                steaming or by boiling
                                                in water, whether or not
                                                chilled, frozen, dried,
                                                salted or in brine;
                                                flours, meals and
                                                pellets of crustaceans,
                                                fit for human
                                                consumption
                                        0307   Molluscs, whether in
                                                shell or not, live,
                                                fresh, chilled, frozen,
                                                dried, salted or in
                                                brine; smoked molluscs,
                                                whether in shell or not,
                                                whether or not cooked
                                                before or during the
                                                smoking process; flours,
                                                meals and pellets of
                                                molluscs, fit for human
                                                consumption
                                        0308   Aquatic invertebrates
                                                other than crustaceans
                                                and molluscs, live,
                                                fresh, chilled, frozen,
                                                dried, salted or in
                                                brine;smoked aquatic
                                                invertebrates other than
                                                crustaceans and
                                                molluscs, whether or not
                                                cooked before or during
                                                the smoking process;
                                                flours, meals and
                                                pellets of aquatic
                                                invertebrates other than
                                                crustaceans and
                                                molluscs, fit for human
                                                consumption
                                        1604   Prepared or preserved
                                                fish; caviar and caviar
                                                substitutes prepared
                                                from fish eggs
                                        1605   Crustaceans, molluscs and
                                                other aquatic
                                                invertebrates, prepared
                                                or preserved
------------------------------------------------------------------------

                             [attachment 3]
                             
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Advancing Sustainable Materials Management: Facts and Figures
[Accessed December 11, 2020]
National Key Facts and Figures in the United States
    Each year, EPA produces a report called Advancing Sustainable 
Materials Management: Fact Sheet, formerly called Municipal Solid Waste 
in the United States: Facts and Figures. It includes information on 
municipal solid waste (MSW) generation, recycling, combustion with 
energy recovery and landfilling. The fact sheet also includes 
information on Construction and Demolition Debris generation, which is 
outside of the scope of MSW.

   Read the Advancing Sustainable Materials Management: Fact 
        Sheet * \1\ 
---------------------------------------------------------------------------
    * Editor's note: Hyperlinks are set as footnotes. Hyperlinked pdfs, 
that are still extant, are retained in Committee file.
    \1\ https://www.epa.gov/facts-and-figures-about-materials-waste-
and-recycling/advancing-sustainable-materials-management.
---------------------------------------------------------------------------
U.S. State and Local Waste and Materials Characterization Reports
    EPA maintains a list of state and local waste characterization 
studies; reports are not available for all states. You can search for 
your state in the table below.
    For additions, changes or updates, please send new reports to 
[email protected]. Most reports exit EPA's website The following 
links exit the site EXIT \2\
---------------------------------------------------------------------------
    \2\ https://www.epa.gov/home/exit-epa.

------------------------------------------------------------------------
        State                               Reports
------------------------------------------------------------------------
             Alabama   Alabama: Economic Impact of Recycling in Alabama
                        and Opportunities for Growth (2012) (PDF) (16
                        pp., 309 K)
                         http://www.adem.state.al.us/programs/land/
                       landforms/
                       CompleteEconomicsOfRecyclingAlabamaReport.pdf.
              Alaska   Alaska: Fairbanks North Star Borough Recycling
                        Plan & Analysis, June 12, 2015 (16 pp., 1.1 MB)
                         http://www.fnsb.us/Boards/Documents/
                       PDCFinalRecyclingReport.pdf.
             Arizona   Arizona: City of Phoenix Waste Characterization
                        Study (2015) (196 pp., 9.5 MB)
                         https://www.phoenix.gov/publicworkssite/
                       Documents/WasteCharacterizationStudyCombined2014-
                       15.pdf.
            Arkansas   State of Recycling in Arkansas
                         https://www.adeq.state.ar.us/poa/recycling/
                       state.aspx.
          California   Cal Recycle Waste Characterization Studies
                        Listing
                         https://www2.calrecycle.ca.gov/
                       WasteCharacterization/Study.
            Colorado   2018 Colorado Waste Composition Study (5 pp.,
                        37.7 KB)
                         https://environmentalrecords.colorado.gov/
                       HPRMWebDrawerHM/RecordView/453419.
                       Colorado: Boulder County Waste Composition Study
                        (2019) (PDF) (62 pp., 3.8 MB)
                         https://assets.bouldercounty.org/wp-content/
                       uploads/2020/04/boulder-county-final-waste-
                       composition-study-2019.pdf.
                       Colorado: Larimer County 2016 Waste Composition
                        and Characterization Analysis (PDF) (58 pp., 6.0
                        MB)
                         https://www.larimer.org/sites/default/files/
                       uploads/2017/wastesort.pdf.
         Connecticut   Connecticut: 2015 Statewide Waste
                        Characterization Study (PDF) (160 pp., 3.81 MB)
                         https://portal.ct.gov/-/media/DEEP/
                       waste_management_and_disposal/
                       Solid_Waste_Management_Plan/
                       CMMSFinal2015MSWCharacterizationStudypdf.pdf?la=e
                       n.
            Delaware   Delaware Solid Waste Authority Statewide Waste
                        Characterization Study, FY 2016 (PDF) (68 pp.,
                        1.45 MB)
                         https://dswa.com/wp-content/uploads/2017/02/
                       Final-Report-DSWA-Waste-Characterization-FY-2016-
                       January-2017.pdf.
District of Columbia   Washington, DC Public Reports on Recycling
                         https://zerowaste.dc.gov/page/reports-1.
             Florida   Florida Solid Waste and Recycling Annual
                        Reporting
                         https://floridadep.gov/waste/waste-reduction/
                       content/recycling.
             Georgia   Georgia Statewide Waste Characterization Study
                        (2005) (PDF) (216 pp., 4.45 MB)
                         https://epd.georgia.gov/sites/epd.georgia.gov/
                       files/related_files/site_page/MSW_Study.pdf.
              Hawaii   Hawaii: City and County of Honolulu Waste
                        Characterization Study (2006) (PDF) (58 pp., 227
                        K)
                         http://www.opala.org/pdfs/solid_waste/2006
                       Final Waste Characterization Report.pdf.
               Idaho   No Report Available
            Illinois   Illinois: Chicago Department of Environment Waste
                        Characterization Study (2010) (PDF) (340 pp.,
                        3.21 MB)
                         https://www.cityofchicago.org/content/dam/city/
                       depts/doe/general/RecyclingAndWasteMgmt_PDFs/
                       WasteAndDiversionStudy/
                       WasteCharacterizationReport.pdf.
                       Illinois: Commodity/Waste Generation and
                        Characterization Study (2015) (PDF) (323 pp.,
                        9.3 MB)
                         http://www.illinoisrecycles.org/wp-content/
                       uploads/2014/10/2015-Waste-Characterization-
                       Update-FINAL.pdf.
             Indiana   Indiana's new waste characterization study (2012)
                        (PDF) (165 pp., 5.78 MB)
                         http://www.in.gov/idem/recycle/files/
                       msw_characterizarion_study.pdf.
                Iowa   Iowa: Statewide Waste Characterization Study
                        (2017) (PDF) (118 pp., 1.5 MB)
                         http://www.iowadnr.gov/Portals/idnr/uploads/
                       waste/wastecharacterization2017.pdf.
              Kansas   Kansas: 2016 State Solid Waste Management Plan
                        (PDF) (40 pp., 2.0 MB)
                         https://www.kdheks.gov/waste/
                       reportspublications/stateplan16.pdf.
            Kentucky   Kentucky: Division of Waste Management Fiscal
                        Year 2018 Annual Report (64 pp., 4.1 MB)
                         https://eec.ky.gov/Environmental-Protection/
                       Waste/Annual Reports/DWM Annual Report for
                       2018.pdf.
                       Kentucky: Louisville Solid Waste Study Report
                        January 2018
                         https://louisvilleky.gov/government/public-
                       works/solid-waste-study-report-january-2018.
                    LouNo Report Available
               Maine   Maine: Residential Waste Characterization Study
                        (2011) (PDF) (30 pp., 463 K)
                         https://umaine.edu/wp-content/uploads/sites/2/
                       2017/04/2011-Maine-Residential-Waste-
                       Characterization-Study.pdf.
                       Maine Solid Waste Generation and Disposal
                        Capacity Report: Calendar Year 2014 (32 pp., 483
                        K)
                         https://www1.maine.gov/dep/ftp/Juniper-Ridge/
                       additional_documents/Maine Solid Waste Generation
                       and Disposal Capacity Report Calendar Year
                       2014.pdf.
            Maryland   Maryland Solid Waste Management and Diversion
                        Report--2017 (for 2016 Data) (PDF) (83 pp., 2.98
                        MB)
                         https://mde.maryland.gov/programs/LAND/
                       SolidWaste/Documents/MSWMR %2717.pdf.
       Massachusetts   Massachusetts: Waste Characterization Data
                        Summary (2011)
                         https://www.mass.gov/files/documents/2016/08/oc/
                       wcsmater.pdf.
                       Recycling & Solid Waste Data for Massachusetts
                        Cities & Towns
                         https://www.mass.gov/lists/recycling-solid-
                       waste-data-for-massachusetts-cities-towns.
            Michigan   Michigan: Economic Impact Potential and
                        Characterization of Municipal Solid Waste in
                        Michigan (202 pp., 3.9 MB)
                         https://www.michigan.gov/documents/deq/480236-
                       14_WMSBF_waste_characterization_report_521920_P7.
                       PDF.
           Minnesota   Minnesota: City of Red Wing Solid Waste
                        Composition Study: Solid Waste Boiler Facility
                        (2009) (PDF) (61 pp., 5.32 MB)
                         https://www.pca.state.mn.us/sites/default/files/
                       wastesort-redwing2009.pdf.
                       Minnesota: Perham Resource Recovery Facility:
                        Solid Waste Composition Study (2012) (PDF) (62
                        pp., 4.5 Mv)
                         https://www.pca.state.mn.us/sites/default/files/
                       wastesort-perham2012.pdf.
                       Minnesota: Solid Waste Composition Study: Covanta
                        Hennepin Energy Resource Company (2012) (PDF)
                        (27 pp., 685 Kb Mb)
                         https://www.pca.state.mn.us/sites/default/files/
                       wastesort-hennepin2012.pdf.
                       Minnesota Statewide Waste Characterization Study
                        (2013) (PDF) (59 pp., 1.66 Mb)
                         https://www.pca.state.mn.us/sites/default/files/
                       w-sw1-60.pdf.
                       Broader Information on the Minnesota MSW
                        Composition Study
                         https://www.pca.state.mn.us/waste/minnesota-msw-
                       composition-study.
         Mississippi   Mississippi: Status Report on Solid Waste
                        Management Facilities and Activities (2017)
                        (PDF) (66 pp., 13.8 MB)
                         https://www.mdeq.ms.gov/wp-content/uploads/2019/
                       01/2017-Status-Report-Final.pdf.
            Missouri   Missouri: 2016-2017 Waste Composition Study
                         http://dnr.mo.gov/env/swmp/specialprojects.htm.
             Montana   Montana: 2018 Integrated Waste Management Plan
                        (37 pp., 942 K)
                         https://deq.mt.gov/Portals/112/Land/Recycle/
                       Documents/pdf/IWMPFinal2018.pdf?ver=2019-10-30-
                       091908-783&timestamp=1572449157973.
                       Montana: Recycling Statistics
                         http://deq.mt.gov/Land/recycle/
                       recycling_statistics_page.
            Nebraska   Nebraska: State Waste Characterization Study
                        (2009) (PDF) (2175 pp., 6.41 MB)
                         http://www.deq.state.ne.us/Publica.nsf/
                       23e5e39594c064ee852564ae004fa010/
                       e3b876e52f86f1a6862575cP900733cca/$FILE/Waste
                       Study Portfolio.pdf.
              Nevada   State of Nevada Solid Waste Management Plan 2017
                        (50 pp., 953 K)
                         https://ndep.nv.gov/uploads/land-waste-solid-
                       swmp-docs/swmp2017-final-8-17.pdf.
       New Hampshire   Biennial Solid Waste Report, October 2019 (23
                        pp., 509 K)
                         https://www.des.nh.gov/organization/
                       commissioner/pip/publications/documents/r-wmd-19-
                       02.pdf.
          New Jersey   No Report Available
          New Mexico   Solid Waste Management Plan (2015) (34 pp., 1.5
                        MB)
                         https://www.env.nm.gov/wp-content/uploads/sites/
                       24/2018/04/SolidWasteManagementPlan.pdf.
            New York   State Solid Waste Management Plan (2010)
                         https://www.dec.ny.gov/chemical/41831.html.
                       New York: NYC Residential, School, and NYCHA
                        Waste Characterization Study (PDF) (68 pp., 11.1
                        MB)
                         https://dsny.cityofnewyork.us/wp-content/
                       uploads/2018/04/2017-Waste-Characterization-
                       Study.pdf.
      North Carolina   North Carolina: Solid Waste Management Annual
                        Reports
                         https://deq.nc.gov/about/divisions/waste-
                       management/sw/data/annual-reports.
                       North Carolina: Orange County Waste Sort Data
                         http://www.co.orange.nc.us/1146/Waste-Sort-
                       Data.
                       North Carolina: Orange County Waste Composition
                        Study (2017)
                         http://www.co.orange.nc.us/DocumentCenter/View/
                       2826/2017-Orange-County-Waste-Characterization-
                       Study-Final-Report-PDF.
        North Dakota   No Report Available
                Ohio   Ohio: Economic Impact Potential of Recycling in
                        Ohio, 2019 (76 pp., 4.3 MB)
                         https://www.epa.state.oh.us/Portals/41/OMM/Ohio-
                       Waste-Characterization-Recycling-Economics-
                       Report.pdf?ver=2019-08-29-123006-543.
                       Ohio: Hamilton County Waste Composition Study,
                        2018
                         http://www.hamiltoncountyrecycles.org/UserFiles/
                       Servers/Server_3788196/File/EnvironmentalServices/
                       SolidWaste/About/
                       Hamilton%20County%20WCS%202018%20Final%20Report.p
                       df.
                       Ohio Waste Characterization Study (2004) (PDF)
                        (319 pp., 1.64 MB)
                         https://epa.ohio.gov/Portals/41/recycling/
                       OhioWasteCharacterizationStudy.pdf.
            Oklahoma   Oklahoma: Annual Solid Waste Tonnage Report
                        (2019) (2 pp., 93 K)
                         https://www.deq.ok.gov/wp-content/uploads/land-
                       division/2015-19_Annual_Tonnage_Reported.pdf.
              Oregon   Oregon: Recycling Characterization and
                        Composition Study 2016/2017
                         https://www.oregon.gov/deq/mm/Pages/Waste-
                       Composition-Study.aspx.
        Pennsylvania   Pennsylvania: 2016 County Recycled Materials
                        Report (PDF) (17 pp., 816 K)
                         http://files.dep.state.pa.us/Waste/Recycling/
                       RecyclingPortalFiles/Documents/
                       2016_Recycling_Report.pdf.
                       Pennsylvania: Statewide Waste Composition Study
                        (2003) (PDF) (175 pp., 2.81 MB)
                         http://files.dep.state.pa.us/Waste/Recycling/
                       RecyclingPortalFiles/Documents/
                       wastecompositionstudy.pdf.
        Rhode Island   Rhode Island Solid Waste Characterization Study
                        (PDF) (58 pp., 2.05 MB)
                         https://www.rirrc.org/sites/default/files/2017-
                       02/Waste Characterization Study 2015.pdf.
      South Carolina   South Carolina Solid Waste Management 2019 Report
                        (PDF) (102 pp., 4.72 MB)
                         https://scdhec.gov/sites/default/files/media/
                       document/2019 SC Solid Waste Management Annual
                       Report OR-1988_4.pdf.
                       The Economic Impact of the Recycling Industry in
                        South Carolina (PDF) (12 pp., 1.13 MB)
                         https://scdhec.gov/sites/default/files/Library/
                       CR-011380.pdf.
        South Dakota   State of South Dakota Recycling/Diversion Report
                        2011 (17 pp., 673 K)
                         https://denr.sd.gov/des/wm/recycle/documents/
                       StateofSouthDakotaRecyclingReport2011.pdf.
           Tennessee   Tennessee: Waste Characterization Study (2008)
                         https://www.epa.gov/smm/study-characterizing-
                       waste-tennessee.
                       Tennessee: Analysis of Tennessee's Household
                        Generated Waste (2015) (23 pp., 1.0 MB)
                         https://www.serdc.org/resources/TN-SF-Waste-
                       Study.pdf.
               Texas   Annual Summary of Municipal Solid Waste
                        Management in Texas
                         https://www.tceq.texas.gov/permitting/
                       waste_permits/waste_planning/wp_swasteplan.html.
                Utah   No Report Available
             Vermont   Vermont Waste Characterization (2018) (PDF) (53
                        pp., 1.31 MB)
                         https://dec.vermont.gov/sites/dec/files/wmp/
                       SolidWaste/Documents/2018-VT-Waste-
                       Characterization.pdf.
                       Vermont: Waste Composition Study (2013) (PDF) (44
                        pp., 1.47 MB)
                         http://dec.vermont.gov/sites/dec/files/wmp/
                       SolidWaste/Documents/
                       finalreportvermontwastecomposition 13may2013.pdf.
            Virginia   Virginia Annual Recycling Summary Report 2017
                        (PDF) (10 pp., 546 K)
                         https://www.deq.virginia.gov/Portals/0/DEQ/Land/
                       RecyclingPrograms/CY2017RecycleRateReport.pdf.
          Washington   Washington Seattle Waste Composition Studies
                         http://www.seattle.gov/utilities/documents/
                       reports/solid-waste-reports/composition-studies.
                       Washington: Statewide Waste Characterization
                        Study (2015-2016) (PDF) (157 pp., 2.3 MB)
                         https://fortress.wa.gov/ecy/publications/
                       documents/1607032.pdf.
                       Washington: Statewide Waste Characterization
                        Study (2015-2016) (PDF) (157 pp., 2.3 MB)
                         https://fortress.wa.gov/ecy/publications/
                       documents/1607032.pdf.
                       Washington: Thurston County Waste Composition
                        Study (2013-2014) (PDF) (145 pp., 1.4 MB)
                         https://www.co.thurston.wa.us/solidwaste/
                       regulations/docs/ThurstonCountyWasteComp2014.pdf.
                       Washington: Seattle Public Utilities Waste
                        Composition Studies
                         https://www.seattle.gov/utilities/documents/
                       reports/solid-waste-reports/composition-studies.
                       Washington: King County Resident[i]al Curbside
                        Characterization, October 2018 (PDF) (89 pp.,
                        1.3 MB)
                         https://kingcounty.gov//media/depts/dnrp/solid-
                       waste/about/documents/waste-characterization-
                       study-2018.ashx?la=en.
       West Virginia   West Virginia Solid Waste Management Plan 2019
                        (PDF) (212 pp., 5.43 MB)
                         http://www.state.wv.us/swmb/State Plans/2019
                       Complete State Plan.pdf.
           Wisconsin   Wisconsin: State-wide Waste Characterization
                        Study (2009) (PDF) (112 pp., 220 MB About PDF)
                         http://dnr.wi.gov/topic/Recycling/documents/
                       WI_WCS_Final_Report_June-30-2010.pdf.
                       Wisconsin: Statewide Waste Characterization Study
                        (2003) (PDF) (114 pp., 738 K About PDF)
                         http://dnr.wi.gov/topic/Recycling/documents/
                       wrws-finalrpt.pdf.
                       Wisconsin: Waste Characterization and Management
                        Study Update (2002) (PDF) (47 pp., 182 K)
                         http://dnr.wi.gov/files/PDF/pubs/wa/WA418.pdf.
             Wyoming   Wyoming Solid Waste Diversion Study, January 3,
                        2013 (179 pp., 4.3 MB)
                         http://deq.wyoming.gov/media/attachments/Solid
                       %26 Hazardous Waste/Solid Waste/Studies %26
                       Assessments/SHWD_Solid-Waste--Recycling-Wyoming-
                       Diversion-Study_2013-0128.pdf.
International Reports  Canada--Metro Vancouver 2015 Waste Composition
                        Monitoring Program (PDF) (71 pp., 8.2 MB)
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                       waste/SolidWastePublications/
                       2015_Waste_Composition_Report.pdf.
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Economic Research Service
Economic Information Bulletin
Number 121
February 2014
The Estimated Amount, Value, and Calories of Postharvest Food Losses at 
        the Retail and Consumer Levels in the United States
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Cover image: Shutterstock.
          Use of commercial and trade names does not imply approval or 
        constitute endorsement by USDA.

Jean C. Buzby, Hodan F. Wells, and Jeffrey Hyman

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    Recommended citation format for this publication: Buzby, Jean C., 
Hodan F. Wells, and Jeffrey Hyman. The Estimated Amount, Value, and 
Calories of Postharvest Food Losses at the Retail and Consumer Levels 
in the United States, EIB-121, U.S. Department of Agriculture, Economic 
Research Service, February2014.

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Abstract
    This report provides the latest estimates by USDA's Economic 
Research Service (ERS) on the amount and value of food loss in the 
United States. These estimates are for more than 200 individual foods 
using ERS's Loss-Adjusted Food Availability data. In 2010, an estimated 
31 percent or 133 billion pounds of the 430 billion pounds of food 
produced was not available for human consumption at the retail and 
consumer levels. This amount of loss totaled an estimated $161.6 
billion, as purchased at retail prices. For the first time, ERS 
estimates of the calories associated with food loss are presented in 
this report. An estimated 141 trillion calories per year, or 1,249 
calories per capita per day, in the food supply in 2010 went uneaten. 
The top three food groups in terms of share of total value of food loss 
are meat, poultry, and fish (30 percent); vegetables (19 percent); and 
dairy products (17 percent). The report also provides a brief 
discussion of the economic issues behind postharvest food loss.
    Keywords: Food consumption, food loss, food recovery, food waste, 
foodservice, recycling, plate waste, processing.
Acknowledgments
    The authors gratefully acknowledge Kevin Hall (National Institutes 
of Health), Ephraim Leibtag (ERS), Hayden Stewart (ERS), Jay Variyam 
(ERS), and Gregory Ziegler (Pennsylvania State University) for their 
reviews of the report. Thanks also to ERS editor Dale Simms and 
designer Cynthia A. Ray.
Contents
    Summary
    Background
    Economics of Food Loss
    Data and Methods
    Results
    Amount
    Value
    Calories
    Discussion
    Appendix: The ERS Loss-Adjusted Food Availability Data and Methods 
for Estimatingthe Amount and Value of Postharvest Food Loss
    References
Errata
    On June 27, 2014, Tables 2, 3, and 5 were updated to correct some 
incorrect values. The errors did not affect summary totals in the 
tables or report findings.
A report summary from the Economic Research Service *
---------------------------------------------------------------------------
    * Find the full report at www.ers.usda.gov/publications/
eibeconomic-informationbulletin/EIB-121.aspx.
    ERS is a primary source of economic research and analysis from the 
U.S. Department of Agriculture, providing timely information on 
economic and policy issues related to agriculture, food, the 
environment, and rural America.
---------------------------------------------------------------------------
February 2014
What Is the Issue?
    ``Food loss'' represents the amount of edible food, postharvest, 
that is available for human consumption but is not consumed for any 
reason; it includes cooking loss and natural shrinkage (e.g., moisture 
loss); loss from mold, pests, or inadequate climate control; and plate 
waste. ``Food waste'' is a component of food loss and occurs when an 
edible item goes unconsumed, such as food discarded by retailers due to 
undesirable color or blemishes and plate waste discarded by consumers. 
Food loss (particularly the food waste component) is becoming an 
increasingly important topic both domestically and internationally. 
Better estimates of the amount and value of food loss, including food 
waste, could help serve as quantitative baselines for policymakers and 
the food industry to set targets and develop initiatives, legislation, 
or policies to minimize food waste, conserve resources, and improve 
human nutrition. Reducing food loss would likely reduce food prices in 
the United States and the rest of the world, though the effects depend 
on the nature of supply, including import and export considerations.
What Did the Study Find?
    In the United States, 31 percent--or 133 billion pounds--of the 430 
billion pounds of the available food supply at the retail and consumer 
levels in 2010 went uneaten. Retail-level losses represented 10 percent 
(43 billion pounds) and consumer-level losses 21 percent (90 billion 
pounds) of the available food supply. (Losses on the farm and between 
the farm and retailer were not estimated due to data limitations for 
some of the food groups.)
    The estimated total value of food loss at the retail and consumer 
levels in the United States was $161.6 billion in 2010. The top three 
food groups in terms of share of total value of food loss were meat, 
poultry, and fish (30 percent, $48 billion); vegetables (19 percent, 
$30 billion); and dairy products (17 percent, $27 billion). The total 
amount of food loss represents 387 billion calories (technically, we 
mean Calorie or kcal hereafter) of food not available for human 
consumption per day in 2010, or 1,249 out of 3,796 calories available 
per American per day. Recovery costs, food safety considerations, and 
other factors would reduce the amount of food that could actually be 
recovered for human consumption.
    The study also reviewed the literature and found that food loss is 
economically efficient in some cases. There is a practical limit to how 
much food loss the United States or any other country could 
realistically prevent, reduce, or recover for human consumption given: 
(1) technical factors (e.g., the perishable nature of most foods, food 
safety, storage, and temperature considerations); (2) temporal and 
spatial factors (e.g., the time needed to deliver food to a new 
destination, and the dispersion of food loss among millions of 
households, food processing plants, and foodservice locations); (3) 
individual consumers' tastes, preferences, and food habits (e.g., 
throwing out milk left over in a bowl of cereal); and (4) economic 
factors (e.g., costs to recover and redirect uneaten food to another 
use).
How Was the Study Conducted?
    This report uses data from ERS's Loss-Adjusted Food Availability 
(LAFA) data series. This data series is ERS's core Food Availability 
data series, adjusted for spoilage, plate waste, and other food losses 
and converted to daily per capita amounts, calories, and food pattern 
equivalents (previously called servings and MyPyramid equivalents). 
Here, the LAFA data series' underlying loss assumptions are used to 
estimate food loss at the retail and consumer levels. The LAFA data 
series is considered to be preliminary because ERS continues to improve 
the underlying loss assumptions and the documentation of the data 
series. In August 2012, new estimates for consumer-level loss were 
incorporated into the data series. Therefore, the relative contribution 
of the different food groups out of total food loss has changed from 
previous ERS publications on food loss. The analysis is an 
extrapolation from the data as of September 2012 and is not based on an 
equilibrium model. For each food group covered here, we calculated the 
amount, value, and representative calories of food loss at the retail 
and consumer levels in the United States in 2010. The value estimates 
are based on retail prices.
Background
    In 1977, a Report to Congress by the General Accounting Office 
(GAO) titled ``Food Waste: An Opportunity To Improve Resource Use'' 
(GAO, 1977) discussed the U.S. Department of Agriculture's activities 
related to food loss in the United States, warning that:

          ``The United States can no longer be lulled by past 
        agricultural surpluses and must consider a future that may 
        contain a world shortage of food. In an environment of plenty, 
        the United States has not historically been concerned with food 
        losses. Although some attention has been focused on the subject 
        in the agricultural research community, in many instances, 
        plentiful food and low prices did not justify the economic 
        expenditure necessary to reduce loss. In an era of potential 
        scarcity, however, it may be necessary to re-examine the 
        present position on losses.'' (p. 1) \1\
---------------------------------------------------------------------------
    \1\ The 1977 report also concluded that ``at present, loss 
represents a large misallocation of resources. For 1974, about 66 
million acres of land and 9 million tons of fertilizer were used to 
produce food ultimately lost. In energy, about 461 million equivalent 
barrels of oil were used to produce food ultimately lost'' (GAO, 1977). 
This amount of loss represents about 23 percent of all food produced 
for direct human consumption in 1974.

    Today, there is a renewed interest in the issues related to food 
loss, both domestically and internationally. For example, USDA and the 
U.S. Environmental Protection Agency (EPA) launched the U.S. Food Waste 
Challenge on June 4, 2013, and the United Nations' Environment 
Programme's (UNEP) World Environment Day's major theme in June 2013 was 
food waste. Some findings from the 1977 GAO report are still relevant 
today, given the resources used in the production of uneaten food, the 
negative externalities associated with food loss (e.g., pollution 
created during food production), and the growing pressures on the 
global food supply (see box, ``Three Reasons for a Growing Interest in 
Food Loss''). Therefore, it may become increasingly important to 
estimate the amount and value of food loss, including food waste, as a 
quantitative baseline for policymakers and the food industry to set 
targets and develop initiatives, legislation, or policies to minimize 
food waste, conserve resources, and improve human nutrition (Buzby and 
Hyman, 2012).
    ``Food loss'' represents the amount of edible food, postharvest, 
that is available for human consumption but is not consumed for any 
reason. It includes cooking loss and natural shrinkage (e.g., moisture 
loss); loss from mold, pests, or inadequate climate control; plate 
waste; and other causes.\2\ ``Food waste'' is a component of food loss 
and occurs when an edible item goes unconsumed, such as food discarded 
by retailers due to blemishes or plate waste discarded by consumers. 
This report calculates the amount and value of food loss in the United 
States. It does not calculate the amount and value of food waste or the 
other subcomponents of food loss. Data are unavailable on the portion 
of food loss that is food waste. The estimates of food loss provided 
here have had the inedible portions removed (e.g., bones, peach pits, 
and asparagus stalks). For example, the food loss estimates for meat, 
poultry, and fish provided are in boneless weight.
---------------------------------------------------------------------------
    \2\ The term ``postharvest food loss'' simply refers to food loss 
after the food is harvested. Definitions of food waste and food loss 
vary worldwide (e.g., inedible portions are included in some food waste 
definitions).
---------------------------------------------------------------------------
  Three Reasons for a Growing Interest in Food Loss
  (1) Food loss means a loss of money and other resources
          Food loss represents significant amounts of money and other 
        resources invested in food production, including land, fresh 
        water, labor, energy, agricultural chemicals (e.g., fertilizer, 
        pesticides), and other inputs to produce food that does not 
        ultimately meet its intended purpose of feeding people (Buzby, 
        et al., 2011). For example, Webber (2012) estimates that food 
        waste represents 2.5 percent of U.S. energy consumption per 
        year, and Hall, et al. (2009) estimate that the production of 
        this wasted food required the expenditure of around 300 million 
        barrels of oil and over 25 percent of the total freshwater 
        consumed by agriculture in the United States. A more detailed 
        understanding of the resource implications of food loss in the 
        United States, including estimates of the land used to produce 
        wasted food, is not available.
          According to the U.S. Environmental Protection Agency (EPA), 
        food waste accounted for 34 million tons (almost 14 percent) 
        out of the 250 million tons of municipal solid waste in the 
        United States in 2010 as measured before recycling (EPA, 2011) 
        (see figure). Less than 3 percent of this food waste was 
        recovered and recycled, with the remainder going to landfills 
        or incinerators (EPA, 2011). In 2010, food waste cost roughly 
        $1.3 billion to landfill (Schwab, 2013). After recycling some 
        materials, such as paper and paperboard, food waste was the 
        single largest amount of municipal solid waste categorized by 
        EPA in 2010, with 21 percent of the total (see figure).

  Total municipal solid waste generation by material before (250 million
           tons) and after recycling (161 million tons), 2010
 
 
 
          Before recycling                     After recycling
 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                     
          Source: EPA, as of September 17, 2012: http://www.epa.gov/
        wastes/conserve/materials/organics/food/fd-basic.htm.
  (2) Food loss means that negative externalities were created 
        throughout the supply chain
          Negative externalities can arise throughout the entire food 
        supply chain from the food's production to the disposal of any 
        uneaten food. Negative externalities are transaction costs that 
        spill over from an action (e.g., food production or disposal) 
        that can adversely affect society and the environment and that 
        are not incorporated in market prices (e.g., the price of 
        food). In general, food that is produced, regardless of whether 
        it is consumed or wasted, contributes to pressure on the 
        availability of fresh water and other natural resources 
        (Lundqvist, et al., 2008), including land needed for 
        urbanization, forests, and protected areas, some of which is 
        necessary for biodiversity and wildlife. Some of these 
        pressures on water, land, and other resources are not fully 
        internalized in prices (e.g., value of wildlife diversity in 
        land prices). A few examples of these externalities include: 
        (1) greenhouse gas emissions from cattle production (Lundqvist 
        et al., 2008); (2) air pollution caused by farm machinery and 
        trucks that transport food; (3) water pollution and damage to 
        marine and freshwater fisheries from agricultural chemical and 
        nutrient runoff during crop and livestock production (Aillery, 
        et al., 2005; Ribaudo, et al., 2011); and (4) soil erosion, 
        salinization, and nutrient depletion that arise from 
        unsustainable production and irrigation practices (Hansen and 
        Ribaudo, 2008; Sullivan, et al., 2004).
          Additionally, incinerating food waste creates emissions that 
        harm the environment and landfilling food waste generates 
        methane gas when food waste decomposes anaerobically. Methane 
        is 21 times more powerful in accelerating global warming than 
        carbon dioxide (EPA, 2011). Landfills account for 34 percent of 
        all human-related methane emissions in the United States (EPA, 
        2011). In addition to methane, landfills produce leachate (a 
        mixture of liquid waste, organic degradation byproducts, and 
        rainwater), which may contaminate groundwater if the landfills 
        are not properly maintained. These negative consequences are 
        offset to some extent when energy is generated from 
        incinerating or landfilling food (e.g., tapping the methane 
        gas).
  (3) The world population is growing, so more food will be needed to 
        feed people
          Reducing food waste will become an increasingly important 
        strategy in the future to help feed a growing human population. 
        It would help by increasing the amount of food available for 
        consumption (particularly food for subsistence households in 
        developing countries) and by lowering prices. The United 
        Nations predicts that the world population will reach 9.3 
        billion by 2050 (United Nations, 2011), and this will require a 
        70-percent increase in food production, net of crops used for 
        biofuels (FAO, 2009). Currently, according to an ERS report, 
        the number of food-insecure people reached 802 million in 2012 
        (Rosen et al., 2012). Low incomes have an important role in 
        this level of food insecurity. Although most of this population 
        growth will occur in developing countries, developed countries 
        like the United States also face issues of hunger and food 
        insecurity.
          In 2012, 49 million people lived in food-insecure households 
        in the United States (Coleman-Jensen, et al., 2013) out of a 
        total population of over 305 million. Food insecurity is when 
        the food intake of one or more household members is reduced and 
        eating patterns are disrupted at times during the year because 
        the household lacks money and other resources for food. Food-
        insecure households accounted for 14.5 percent of U.S. 
        households: 9.2 percent had low food security and 5.7 percent 
        had very low food security (see figure).

    Some food loss is inevitable because food is inherently perishable 
and some food needs to be discarded to ensure food safety. For example, 
some unsold or uneaten food at restaurants, supermarkets, or in homes 
is not suitable for consumption. Some losses--like the discard of moldy 
fruit from the produce shelf at the supermarket and the condemnation of 
diseased animals at the slaughtering house--are necessary to ensure the 
safety and wholesomeness of the food supply. Such foods are not 
recoverable for human use. Likewise at restaurants, plate scraps not 
taken home by patrons are appropriately discarded out of health 
considerations. Legal liability and strict food safety rules, such as 
those in the wake of the mad cow disease scare, inhibit food recovery 
and redistribution in some cases. Discarding unsafe food and food 
suspected of being unsafe reduces the individual and societal costs of 
foodborne illness and, in some cases, the potential legal liability.
    Many causes of food loss can occur across the entire food supply 
chain in developed countries (see box, ``Causes of Food Loss and Waste 
at the Farm, Farm-to-Retail, Retail, and Consumer Levels''). The share 
of total food loss due to each of these causes is unknown.
    This report estimates the amount, value, and calories of food loss 
at the retail and consumer levels in the United States, both in total 
and per capita by major food group.\3\ No adjustments are made for 
changes in the demographic makeup of the population. Given the recent 
and growing interest in food loss and waste domestically, up-to-date 
estimates on the magnitude of food loss in the United States are 
timely. This report updates and extends previous ERS publications on 
food loss in several important ways:
---------------------------------------------------------------------------
    \3\ Here, this report uses the term ``calories'' to represent 
``Calories'' (i.e., with capital ``C'') or kilocalories because 
``calories'' is the commonly used spelling in the media and informal 
publications, Wikipedia provides more information on this distinction 
(http://en.wikipedia.org/wiki/Calorie).

  1.  The report updates previous ERS estimates of the amount and value 
            of food loss for foods at the retail and consumer levels in 
            the United States in 2010 using data as of September 2012. 
            Previous ERS food loss estimates for 2008 are available in 
            Buzby and Hyman (2012) (amount and value for all 
            commodities), Buzby, et al. (2011) (value provided only for 
            fruits and vegetables), and Hodges, et al. (2010) (amount 
---------------------------------------------------------------------------
            estimates in tonnes).

  2.  The estimates in this report incorporate new consumer-level loss 
            assumptions, which were introduced into the Loss-Adjusted 
            Food Availability (LAFA) data series in August 2012 (see 
            documentation: http://www.ers.usda.gov/data-products/food-
            availability-(per-capita)-data-system/loss-adjusted-food-
            availability-documentation.aspx) and which were not used in 
            the aforementioned studies.

  3.  This report discusses the economics of food loss in greater depth 
            than in previous ERS reports.

  4.  This report provides ERS's first estimates of the amount of food 
            loss in terms of calories.

  5.  The LAFA data series is part of the Food Availability Data 
            System, which now faces important data challenges in terms 
            of temporarily suspended or unavailable data for some 
            commodities (ERS, 2011). This means that the 2010 estimates 
            provided in this report may be the last complete year for 
            some time whereby all commodities and food groups are 
            represented in the FADS. This emphasizes the importance of 
            providing the 2010 food loss estimates with detailed 
            information and documentation about the estimates. This 
            documentation will change as new data and information are 
            included in the FADS and if there is a change in the 
            methodology of how the food loss estimates are calculated.

 
 
 
  Causes of Food Loss and Waste at the Farm, Farm-to-Retail, Retail, and
                             Consumer Levels
    (Farm Level (not measured in this report)
 
     Consumption or damage by insects, rodents, birds, or
     microbes (e.g., molds, bacteria),a and damage by unfavorable or
     extreme weather (e.g., droughts, floods, hurricanes, and freezes).
 
     Diminishing returns when harvesting additional increments
     of production and other factors leading to leaving some edible
     crops unharvested.
 
     Overplanting or overpreparing due to difficulty predicting
     number of buyers/customers.
 
    Farm-to-Retail Level (not measured in this report)
 
     Rejection of some products for human consumption due to
     industry or government food safety regulations or standards (e.g.,
     livestock condemned at slaughter for food safety reasons).
 
     Byproducts from food processing landfilled or incinerated
     (i.e., not diverted to other food uses such as for ingredients in
     mixed foods).
 
     Outgrading of blemished, misshapen, or wrong-sized foods
     due to minimum quality standards by buyers, which are the result of
     consumer demand for high-quality, cosmetically appealing, and
     convenient foods.
 
     Spillage and damage, such as by equipment malfunction
     (e.g., faulty cold or cool storage) or inefficiencies during
     harvesting, drying, milling, transporting, or processing.
 
    Retail Level
 
     Dented cans and damaged packaging. Inappropriate packaging
     that damages produce.b
 
     Unpurchased holiday foods.
 
     Spillages, abrasion, bruising, excessive trimming,
     excessive or insufficient heat, inadequate storage, technical
     malfunction.a
 
     Overstocking or overpreparing due to difficulty predicting
     number of customers.
 
     Culling blemished, misshapen, or wrong-sized foods in an
     attempt to meet consumer demand.
 
    Consumer Level
 
     Spillages, abrasion, bruising, excessive trimming,
     excessive or insufficient heat, inadequate storage, technical
     malfunction.a
 
     Sprouting of grains and tubers, biological aging in fruit.a
 
     Consumers becoming confused over ``use-by'' and ``best
     before'' dates so that food is discarded while still safe to eat.b
 
     Lack of knowledge about preparation and appropriate portion
     sizes. For example, lack of consumer knowledge of when a papaya is
     ripe, how to prepare it, and how to use it as an ingredient are
     reasons for high papaya loss.c
 
     Industry or government standards may cause some products to
     be rejected for human consumption (e.g., plate waste can't be re-
     used at restaurants).
 
     Psychological tastes, attitudes, and preferences leading to
     plate waste/scrapings (e.g., human aversion, such as ``I don't eat
     that,'' or refusal to eat a food for religious reasons).a Consumer
     demand for high cosmetic standards.
 
     Seasonal factors: more food is wasted in summer.d
 
     Uneaten or leftover holiday foods.
 
Sources:
a Zeigler and Floros (2011).
b Parfitt, et al. (2010).
c Buzby, et al. (2009).
f Gallo (1980)
The remainder was constructed by the authors, 2012. A previous version
  of this table was published in Buzby and Hyman (2012). Some of these
  examples of causes may occur at more than one level (e.g., spillage).

    Although ERS adjusts for farm-to-retail level losses for some of 
the included commodities (e.g., canned fruit and vegetables), ERS does 
not provide summary estimates of food loss at the farm-to-retail levels 
because of the lack of comparable data for each individual food in the 
LAFA data series.
    The food loss estimates provided in this report at the retail and 
consumer levels are greater than the amounts of food that could be 
recovered and diverted to feed people. As previously mentioned, some 
uneaten food cannot be efficiently and effectively diverted due to the 
perishability of most foods, high transportation and distribution 
costs, and other challenges, such as the need to ensure food safety.
    On the other hand, the per capita estimates of the total amount of 
food available for consumption (i.e., the primary reason why this data 
series was created) using data from the LAFA data series are high,\4\ 
suggesting that underlying food loss assumptions and resulting food 
loss estimates for all included commodities and food groups presented 
here are, on average, understated. In 2010, the estimated calories 
available per capita per day was 2,547, which is high, even given the 
current obesity epidemic.\5\ If a person with caloric needs of 2,100 
calories per day actually consumed 2,547 calories per day, he/she would 
gain an implausible and unsustainable amount of weight per year or over 
a lifetime. In other words, if the underlying food loss assumptions 
were higher, then more food (i.e., associated with the loss) would be 
subtracted from the unadjusted amounts of food available for 
consumption and the estimated loss-adjusted amount of calories per 
capita per day would be lower than the current estimate of 2,547 
calories per day and thus more realistic.
---------------------------------------------------------------------------
    \4\ The primary purpose of the LAFA data series is to estimate 
consumed amounts of food from the amount of food available in the U.S. 
food supply. This differs from approaches, such as the National Health 
and Nutrition Examination Survey (NHANES), that are based on 24 hour 
recalls and tend to be underestimates of actual consumption. The extent 
of underestimation is well documented (especially for calories) using 
doubly labeled water methods. The LAFA estimates of per capita 
availability are well above NHANES estimates, suggesting that the 
underlying food loss assumptions in the data series and the ERS food 
loss estimates provided here are conservative. The LAFA estimates are 
also higher than the energy requirements of many cohorts of the 
population as determined by the Institute of Medicine (IOM, 2005). This 
also suggests that the ERS food loss estimates are conservative.
    \5\ This 2,547 calories per capita per day is calculated from 3,796 
total calories minus 1,249 calories of food loss (see Table 6).
---------------------------------------------------------------------------
Economics of Food Loss
    There is a practical limit to how much food loss the United States 
could realistically prevent, reduce, or recover for human consumption 
given:

  1.  technical factors (e.g., the perishable nature of most foods; 
            food safety, storage, and temperature considerations);

  2.  temporal and spatial factors (e.g., the time needed to deliver 
            food to a new destination, and the dispersion of food loss 
            among millions of U.S. households, food processing plants, 
            and foodservice locations);

  3.  individual consumers' tastes, preferences, and food habits (e.g., 
            a child's distaste for bread crusts, the habit of throwing 
            out milk left over in a bowl of cereal); and

  4.  economic factors (e.g., cost and other resource constraints, such 
            as to recover and redirect uneaten food to another use). 
            These economic factors are often entwined with the 
            technical, temporal, and spatial factors.

    Therefore, it is unrealistic to think that the United States or any 
other country will ever entirely eliminate food waste. GAO's 1977 
Report to Congress (p. 44) considers the question of whether losses are 
economically justifiable:

          ``From a business standpoint, the value of food product saved 
        for human use should be equal to, or greater than, the cost of 
        saving it. To the extent that the costs exceed value, good 
        business judgment dictates that the loss is an acceptable cost. 
        In the course of preparing this report, no material has been 
        found that would indicate that opportunities were knowingly 
        overlooked by business owners to conserve food at an acceptable 
        cost. The profit motive should dictate against such loss. The 
        slowness of technology transfer, however, can serve to impede 
        the implementation of loss-reducing techniques. It is, 
        therefore, possible that opportunities to make loss physically 
        and economically preventable are not being utilized. In sum, at 
        this point, losses that have been identified are, for the most 
        part, economically justifiable.''

    There really are two separate challenges in reducing food loss and 
its environmental and other impacts: (1) how to reduce the amount of 
uneaten food in the first place (prevention), and (2) what to do with 
uneaten food once it is generated (disposal). As the first challenge is 
met more fully, the second becomes less of an issue. The impact on food 
prices and markets of a reduction in food loss depends on if the loss 
was prevented in the first place or if what would be counted here as 
``food loss'' is diverted to other economic uses. If uneaten food is 
simply diverted to other economic uses beyond human consumption (e.g., 
animal feed or energy generation) so that domestic demand for food and 
domestic food production remains roughly the same, then there won't be 
downward pressure on food prices and the agriculture and food 
industry's business will remain roughly unchanged.
    However, if food loss is prevented or reduced to the extent that 
less food is needed to feed people (i.e., the demand for food 
decreases), then this would likely reduce food prices in the United 
States and the rest of the world. However the effects on food prices 
will depend on the relevant supply and demand elasticities (i.e., 
economic measures of the responsiveness of supply and demand to a 
change in its price). For example, if more food is exported to offset 
the effect on food markets from domestic reductions in food loss, then 
food prices may not decrease as much as without the boost in exports. 
If the domestic demand for food decreases, then the demand for inputs 
like land, labor, and capital may decline as well. If per capita food 
loss is significantly reduced by increased food consumption by people 
already consuming above their energy needs, then the costs associated 
with increased obesity may grow. It is important to note that the value 
of food loss estimated in this report is for one snapshot in time and 
would change as retail prices change in response to supply and demand 
factors.
    All of the loss assumptions used in the LAFA data series are 
currently available on the ERS website, and some of this commodity-
specific information may be helpful when analyzing food loss for a 
particular commodity at the retail or consumer level (ERS, 2012a). 
Additional types of economic costs could be included in a benefit-cost 
analysis of a specific loss-reducing initiative. These costs could 
include the costs of disposing of unused food, the cost and value of 
food going to a lower value use (e.g., animal feed), and the lost 
opportunity cost of resources wasted. Data are largely unavailable on 
exactly where, why, and how food losses and waste occur and the 
economic incentives to reduce these losses.
    In some cases, the amount and value estimates in this report are 
likely too aggregated to provide helpful measures of the economic 
incentives for a specific food company to reduce food loss. A food 
company would need more tailored estimates to help inform its decision 
to reduce food loss, particularly if the decision involves multi-
ingredient foods or commodities not covered in the LAFA data series 
(e.g., LAFA provides data on commodities and whole foods such as eggs, 
beef, and fresh spinach). For example, a food company may weigh the 
costs of switching to more expensive packaging for fresh meat against 
the benefits of having that packaging extend the shelf life of the 
meat. In short, companies will adopt a loss-reducing practice if it is 
economically justifiable, that is, if the benefits outweigh the costs. 
This cost-benefit analysis may include consideration of consumer 
goodwill toward a firm, such as when a sandwich shop donates uneaten 
yet wholesome food to a community feeding organization at the end of 
each day.
    More specific food loss estimates could help policymakers in 
designing food-loss-reducing regulations. Publicizing where and how 
much food goes uneaten and the value of this loss may help inform 
policymakers about the issue and help increase the efficiency of the 
farm-to-fork food system and food recovery efforts to feed the growing 
human population. Other policy issues related to food loss include 
sustainability, the impact on international trade, and government 
funding of research and development for loss-reducing technologies 
(e.g., for food, food packaging, and food system practices).
    Losses at the consumer level occur for many reasons, such as 
different tastes and preferences or consumers buying more than they 
need (see box, ``Causes of Food Loss and Waste at the Farm, Farm-to-
Retail, Retail, and Consumer Levels''). For many Americans, food 
purchases are a small component of all household spending, weakening 
incentives to reduce food loss on monetary grounds alone. The average 
American spent 11.2 percent of disposable income on food in 2010.\6\ 
Consumer food loss is widespread, so mitigating it will be challenging. 
There are an estimated 119 million households (U.S. civilian 
population), over a half a million dining establishments (i.e., 
fullservice restaurants, fast-food outlets), and numerous other places 
where people eat (e.g., schools, institutions, and prisons) across the 
United States.
---------------------------------------------------------------------------
    \6\ In 2010, the average American spent $4,016 on food (both for 
at-home and away-from-home consumption) (ERS, 2012b) out of an average 
disposable income of $36,016 in 2010 (BLS, 2012).
---------------------------------------------------------------------------
    This range of food loss combined with economies of scale suggest 
that large, industry-led initiatives or government-led policies, such 
as information campaigns and additional changes in Federal laws, may 
have the greatest potential to reduce food loss in the next decade. One 
example of a large initiative to reduce food waste is the Waste 
Resources Action Programme (WRAP). WRAP estimates that between 2007 and 
2012, household food waste in the United Kingdom decreased 15 percent 
despite a 4-percent increase in the number of households (Goodwin, 
2013). This is presumably due in part to its campaign to raise 
awareness of the issue by consumers, businesses, and local authorities 
(e.g., Love Food Hate Waste launched in 2007).\7\ There have been other 
major campaigns launched to raise public awareness of food waste and to 
promote reduction, such as the Food Wise Hong Kong Campaign launched in 
December 2012. In the United States, there have been several laws 
(e.g., Bill Emerson Good Samaritan Food Donation Act, Internal Revenue 
Code 170(e)(3), and the U.S. Federal Food Donation Act of 2008) that 
have encouraged food donation by providing liability protection to 
donors or tax incentives, though the full impact on food loss or food 
waste has not been measured.\8\
---------------------------------------------------------------------------
    \7\ For more information on WRAP, see Quested and Parry (2011) and 
www.wrap.org.uk.
    \8\ See http://www.usda.gov/oce/foodwaste/resources/donations.htm 
for more information.
---------------------------------------------------------------------------
    Currently, there is a growing list of participants in the U.S. Food 
Waste Challenge undertaking activities to reduce, recover, or recycle 
food waste, and these participants include six USDA agencies, major 
food companies, smaller private firms, universities and colleges, 
sports teams, and entertainment resorts, among others.\9\ Even a 
modest, yet economically feasible, decrease in food loss from small 
loss-reducing initiatives or newly adopted processing, packaging, and 
storage technologies could lessen the environmental impacts of food 
waste generation and disposal. And if wholesome food is recovered for 
human consumption in this process, it could reduce food insecurity by 
supplementing existing food assistance efforts and could potentially 
provide tax savings to farms, food retailers, and foodservice 
establishments that donate food. However, no single intervention would 
be a panacea and, as previously mentioned, food loss will never be 
entirely eliminated. Substantial inroads in reducing food loss would 
likely require a combination of approaches. Prior to the adoption of 
new initiatives, policies, or laws to reduce food loss, both the costs 
and benefits should be considered. For example, while redirecting 
edible and wholesome food to food banks takes advantage of food already 
available for consumption, food safety and transportation challenges 
and costs need to be considered.
---------------------------------------------------------------------------
    \9\ See http://www.usda.gov/oce/foodwaste/participants.htm for 
details.
---------------------------------------------------------------------------
    In the end, economic incentives and consumer behavior will be 
paramount in reducing food loss, and these efforts must coexist with 
obtaining an acceptable return on investment by food industry members; 
protecting the environment and worker safety; and fulfilling consumer 
demand for food safety, quality, variety, and affordability.
Data and Methods
    ERS's Loss-Adjusted Food Availability (LAFA) data are derived from 
ERS per capita Food Availability data adjusted to remove the inedible 
portions (e.g., bones, pits, and peels) and to account for food 
spoilage, plate waste, and other losses (e.g., cooking loss). The 
primary purpose of the LAFA data is to more closely estimate actual per 
capita intake. In addition to providing the estimated amount of pounds 
per capita ingested per year and per day, the data series also provides 
estimates of the loss-adjusted number of calories consumed daily (per 
capita) and daily food pattern equivalents (previously called servings 
and MyPyramid equivalents). Here, we use the underlying food loss 
assumptions in the LAFA data series as of September 2012 to estimate 
food loss for 2010 at the retail and consumer levels, both per capita 
and in total for the United States. The series currently covers more 
than 200 agricultural commodities from 1970 to the most recent year of 
data. The data for individual commodities are aggregated into food 
groups to facilitate comparison with Federal dietary 
recommendations.\10\
---------------------------------------------------------------------------
    \10\ Currently, the series is calibrated for comparison against the 
2005 Dietary Guidelines for Americans, but ERS has plans to update the 
LAFA data with the 2010 Dietary Guidelines for Americans.
---------------------------------------------------------------------------
    The appendix discusses the construction of the LAFA data series, 
provides a list of commodities covered (see appendix box, ``Commodity 
Coverage in the 2010 Loss-Adjusted Food Availability Data,'' p. 26), 
and discusses some of the limitations of the data. The appendix also 
provides detail on the steps that we followed for estimating the 
amount, value (i.e., using 2010 retail prices), and calories of food 
loss in the United States. This data series is considered to be 
preliminary because ERS continues to improve the underlying food loss 
assumptions and documentation (for details, see http://
www.ers.usda.gov/data-products/food-availability-(per-capita)-data-
system/loss-adjusted-food-availability-documentation.aspx). The LAFA 
data can be accessed on the ERS website through Excel spreadsheets that 
provide all of the current loss assumptions and a largely consistent 
structure for the data series (i.e., the sequence of steps by which the 
different types of losses are removed from the system) (ERS, 2012a).
Results
    The results from our analysis of ERS' Loss-Adjusted Food 
Availability data pertain to the amount, value, and calories of food 
loss at the retail and consumer levels in the United States in 2010. 
Each subsection includes two tables (one for total and one for per 
capita estimates) and a figure that divides the total food loss 
estimate into shares by food group.
Amount
    ERS estimates that 31 percent or 133 billion pounds of the 430 
billion pounds of the edible and available food supply at the retail 
and consumer levels in the United States in 2010 went uneaten (table 
1). Retail-level losses represented 10 percent (43 billion pounds) and 
consumer-level losses 21 percent (90 billion pounds) of the available 
food supply. Losses on the farm and between the farm and retailer were 
not estimated due to data limitations for some of the food groups. Had 
these losses been included, total postharvest loss in the United States 
would be over 31 percent of the food supply. For example, for fresh 
produce alone, an estimated 12 percent goes uneaten in developed 
countries from production to retail sites, with a range from 2 to 23 
percent for individual commodities (Kader, 2005).
    Our estimates are based on the current loss assumptions in the LAFA 
data series, which include retail-level loss estimates from Buzby et 
al. (2009). That study--comparing supplier shipment data with point-of-
sale data from six large supermarket retailers--found that annual 
supermarket losses for 2005 and 2006 averaged 11.4 percent for fresh 
fruit, 9.7 percent for fresh vegetables, and 4.5 percent for fresh 
meat, poultry, and seafood. ERS is currently in the process of 
obtaining 2011 and 2012 retail-level food loss estimates for these 
commodities.\11\ The loss assumptions for all other foods in the data 
series at the retail level have not been updated (i.e., added fats and 
oils, added sugars and sweeteners, grains, dairy products, and 
processed fruit and vegetables (frozen, canned, dried, and juice).\12\
---------------------------------------------------------------------------
    \11\ Some data users have suggested that the total retail-level 
loss estimates of 10 percent and 43 billion pounds are high given 
modern packaging, cold-chain, and inventory tracking technologies and 
other business practices that are commonly used by retailers.
    \12\ The LAFA data series is based on individual commodities/foods, 
not processed products. The added fats and oils group includes foods 
that are typically added to other foods when eaten and do not include 
the naturally occurring fats in meat and dairy products, for example. 
Similarly, added sugars and syrups are caloric foods added to foods 
during processing or preparation. Added sugars and sweeteners do not 
include naturally occurring sugars, such as those found in milk and 
fruit. Non-caloric sweeteners are not included in the LAFA data series.
---------------------------------------------------------------------------
    New (2010) estimates of consumer-level loss for most commodities 
(Muth, et al., 2011) were incorporated into the LAFA data series in 
August 2012 (see ERS (2012a) for details).\13\ This is the primary 
reason why the shares of loss by food group differ from other recent 
ERS publications, particularly the drop in share for the meat, poultry, 
and fish group (Buzby and Hyman, 2012; Buzby, et al., 2011).
---------------------------------------------------------------------------
    \13\ RTI International used a numerical estimation method to 
calculate consumer-level food loss estimates using Nielsen Homescan 
data and National Health and Nutrition Examination Survey (NHANES) 
data. ERS then analyzed how the LAFA per capita data would change if 
the proposed RTI estimates of consumer-level food loss were 
incorporated into the data series (Muth, et al., 2011).
---------------------------------------------------------------------------
    When the 133 billion pounds of food loss at the retail and consumer 
levels in 2010 is broken down by food group, the top three food groups 
in terms of loss are: (1) dairy products (25 billion pounds or 19 
percent); (2) vegetables (25 billion pounds or 19 percent); and (3) 
grain products (18.5 billion pounds or 14 percent) (fig. 1).

                                              Table 1: Estimated total food loss in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
            Commodity              Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
                                 -----------------------------------------------------------------------------------------------------------------------
                                   Billion pounds    Billion pounds      Percent       Billion pounds      Percent       Billion pounds      Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products               60.4              7.2               12             11.3               19             18.5               31
                        Fruit               64.3              6.0                9             12.5               19             18.4               29
  Fresh.........................            37.6              4.4               12              9.5               25             13.9               37
  Processed.....................            26.7              1.6                6              2.9               11              4.5               17
                   Vegetables               83.9              7.0                8             18.2               22             25.2               30
  Fresh.........................            53.5              5.2               10             12.8               24             18.0               34
  Processed.....................            30.4              1.8                6              5.3               18              7.1               24
               Dairy products               83.0              9.3               11             16.2               20             25.4               31
  Fluid milk....................            53.8              6.5               12             10.5               20             17.0               32
  Other dairy products..........            29.1              2.8               10              5.7               19              8.5               29
      Meat, poultry, and fish               58.4              2.7                5             12.7               22             15.3               26
  Meat..........................            31.6              1.4                4              7.2               23              8.6               27
  Poultry.......................            22.0              0.9                4              3.9               18              4.8               22
  Fish and seafood..............             4.8              0.4                8              1.5               31              1.9               39
                         Eggs                9.8              0.7                7              2.1               21              2.8               28
        Tree nuts and peanuts                3.5              0.2                6              0.3                9              0.5               15
   Added sugar and sweeteners               40.8              4.5               11             12.3               30             16.7               41
          Added fats and oils               26.0              5.4               21              4.5               17              9.9               38
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................           430.0             43.0               10             89.9               21            132.9               31
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).

Figure 1: Estimated total amount of food loss in the United States by 
        food group, 2010

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: ERS (2012a).

    In 2010, the average amount of food loss per American was 429 
pounds, of which 139 pounds at the retail level and 290 pounds at the 
consumer level went uneaten (table 2). At the consumer level, 59 pounds 
of vegetables, 52 pounds of dairy products, and 41 pounds of meat, 
poultry, and fish per capita from the food supply in 2010 went uneaten.
Value
    The total value of food loss at the retail and consumer levels was 
an estimated $161.6 billion in 2010 (table 3). The two food groups with 
the highest value of losses were meat, poultry, and fish ($48.5 
billion) and vegetables ($30 billion). These estimates are based on the 
value of foods as purchased at retail prices. The calculations are 
described more fully in the appendix.
    When the total value of food loss at the consumer level in 2010 is 
broken down by food group, the meat, poultry, and fish group comprises 
almost a third (30 percent) of the total (fig. 2), a much greater share 
than by weight (12 percent in figure 1) because foods in this group 
tend to cost more per pound than many other foods.

                                      Table 2: Estimated per capita amount of food loss in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
            Commodity              Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
                                 -----------------------------------------------------------------------------------------------------------------------
                                       Pounds            Pounds          Percent           Pounds          Percent           Pounds          Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products                195               23               12               36               19               60               31
                        Fruit                208               19                9               40               19               59               29
  Fresh.........................             121               14               12               31               25               45               37
  Processed.....................              86                5                6                9               11               15               17
                   Vegetables                271               23                8               59               22               81               30
  Fresh.........................             173               17               10               41               24               58               34
  Processed.....................              98                6                6               17               18               23               24
               Dairy products                268               30               11               52               20               82               31
  Fluid milk....................             174               21               12               34               20               55               32
  Other dairy products..........              94                9               10               18               19               27               29
      Meat, poultry, and fish                189                9                5               41               22               49               26
  Meat..........................             102                5                4               23               23               28               27
  Poultry.......................              71                3                4               13               18               15               22
  Fish and seafood..............              16                1                8                5               31                6               39
                         Eggs                 32                2                7                7               21                9               28
        Tree nuts and peanuts                 11                1                6                1                9                2               15
   Added sugar and sweeteners                132               14               11               40               30               54               41
          Added fats and oils                 84               18               21               15               17               32               38
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................           1,388              139               10              290               21              429               31
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).


                        Table 3: Estimated total value of food loss at the retail and consumer levels in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
                                   Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
            Commodity            -----------------------------------------------------------------------------------------------------------------------
                                                        Billion                           Billion                           Billion
                                  Billion  dollars      dollars          Percent          dollars          Percent          dollars          Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products               36.1              4.3               12              6.9               19             11.2               31
                        Fruit               62.2              5.8                9             14.1               23             19.8               32
  Fresh.........................            37.1              4.2               11             10.4               28             14.7               40
  Processed.....................            25.0              1.5                6              3.7               15              5.2               21
                   Vegetables              108.7              9.6                9             20.4               19             30.0               28
  Fresh.........................            62.1              6.9               11             13.2               21             20.1               32
  Processed.....................            46.6              2.8                6              7.2               15             10.0               21
               Dairy products               91.5              8.3                9             18.6               20             27.0               29
  Fluid milk....................            20.0              2.4               12              4.0               20              6.4               32
  Other dairy products..........            71.5              5.9                8             14.6               20             20.5               29
      Meat, poultry, and fish              181.9              8.8                5             39.7               22             48.5               27
  Meat..........................            83.4              3.8                5             19.3               23             23.2               28
  Poultry.......................            73.6              2.9                4             12.5               17             15.4               21
  Fish and seafood..............            24.8              2.1                8              7.9               32              9.9               40
                         Eggs               10.9              0.8                7              2.3               21              3.1               28
        Tree nuts and peanuts               12.1              0.7                6              1.3               11              2.1               17
   Added sugar and sweeteners               16.4              1.8               11              4.8               29              6.6               40
          Added fats and oils               34.2              6.6               19              6.8               20             13.4               39
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................           554.0             46.7                8            114.9               21            161.6               29
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).

Figure 2: Estimated total value of food loss in the United States by 
        food group, 2010

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: ERS (2012a).

    Per capita, food loss in 2010 totaled $522 per year at retail 
prices: $151 per year at the retail level and $371 at the consumer 
level (table 4). The latter amounts to 9.2 percent of the average 
dollar value spent on food per consumer in 2010 ($4,016) (ERS, 2012b) 
and 1 percent of the average disposable income ($36,016) (BLS, 2012). 
The yearly total of 290 pounds (table 2) of food loss per capita in 
2010 at the consumer level, at an estimated retail price of $371, 
translates into 0.8 pound or roughly $1 per day. This is slightly lower 
than the $390 of food loss per capita in 2008 estimated in Buzby and 
Hyman (2012), largely because new consumer-level food loss estimates 
were adopted in the LAFA system in August 2012. At the consumer level, 
three food groups made up 68 percent of the total food loss: meat, 
poultry, and fish ($128/year per capita); vegetables ($66/year); and 
dairy products ($60/year).
    For comparison, another recently published study that used the same 
LAFA data but different assumptions and retail prices estimated that 
the economic and climate change impacts of food loss for 134 
commodities in the United States cost $198 billion in 2009 (Venkat, 
2012). This translates into $400 per person.

                      Table 4: Estimated per capita value of food loss at the retail and consumer levels in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
            Commodity              Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
                                 -----------------------------------------------------------------------------------------------------------------------
                                       Dollars          Dollars          Percent          Dollars          Percent          Dollars          Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products                117               14               12               22               19               36               31
                        Fruit                201               19                9               45               23               64               32
  Fresh.........................             120               14               11               34               28               47               40
  Processed.....................              81                5                6               12               15               17               21
                   Vegetables                351               31                9               66               19               97               28
  Fresh.........................             201               22               11               43               21               65               32
  Processed.....................             150                9                6               23               15               32               21
               Dairy products                295               27                9               60               20               87               29
  Fluid milk....................              65                8               12               13               20               21               32
  Other dairy products..........             231               19                8               47               20               66               29
      Meat, poultry, and fish                587               28                5              128               22              157               27
  Meat..........................             269               12                5               62               23               75               28
  Poultry.......................             238                9                4               40               17               50               21
  Fish and seafood..............              80                7                8               25               32               32               40
                         Eggs                 35                2                7                8               21               10               28
        Tree nuts and peanuts                 39                2                6                4               11                7               17
   Added sugar and sweeteners                 53                6               11               15               29               21               40
          Added fats and oils                111               21               19               22               20               43               39
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................           1,788              151                8              371               21              522               29
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).

Calories
    This report provides ERS's first estimates of the number of 
calories of food loss at the retail and consumer levels in the United 
States to help put the magnitude of this food loss into perspective. In 
total, out of the entire U.S. food supply in 2010, an estimated 387 
billion calories of food were available each day but were not consumed 
for any reason (table 5). This amount of food loss translates into 141 
trillion calories per year. Of course, many factors would affect 
whether these foods could be diverted to feed people in real life, such 
as food safety considerations and storage and transportation costs. 
Additionally, this food loss estimate is based on calories alone and 
does not address the more complex nutritional needs of individual 
people, such as for specific vitamins and minerals.
    Interestingly, the food group shares of total calories that went 
uneaten (fig. 3) are noticeably different than the shares for the 
amount (fig. 1) or value (fig. 2) of food loss. In particular, the 
shares for added fats and oils, added sugars and sweeteners, and grains 
are much higher for the calories figure, reflecting these foods' 
caloric density per pound.
    Daily food loss for the average American totaled 1,249 calories 
(out of 3,796 calories available per capita per day), of which 460 
calories occurred at the retail level and 789 calories occurred at the 
consumer level (table 6). At the consumer level, the average daily food 
loss per American included 187 calories of added sugar and sweeteners, 
166 calories of grain products, and 154 calories of added fats and 
oils. In comparison, Kevin Hall and others at the National Institutes 
of Health used data from the Food and Agriculture Organization's (FAO) 
food balance sheets and a mathematical model of human energy 
expenditure to calculate the energy content of food waste in the United 
States. Hall, et al. (2009) estimated that food waste, on average, is 
equivalent to 1,400 calories per person per day or 150 trillion total 
calories per year versus ERS's estimate of 1,249 calories per person 
per day and 141 trillion total calories per year.

                       Table 5: Estimated total calories of food loss at the retail and consumer levels in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
                                   Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
            Commodity            -----------------------------------------------------------------------------------------------------------------------
                                       Billion          Billion                           Billion                           Billion
                                      calories          calories         Percent          calories         Percent          calories         Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products              273.0             32.8               12             51.3               19             84.1               31
                        Fruit               37.1              3.1                8              8.8               24             11.9               32
  Fresh.........................            19.4              2.1               11              6.5               33              8.5               44
  Processed.....................            17.7              1.1                6              2.3               13              3.4               19
                   Vegetables               52.6              3.8                7             10.1               19             13.9               26
  Fresh.........................            22.4              2.0                9              6.7               30              8.7               39
  Processed.....................            30.2              1.8                6              3.4               11              5.2               17
               Dairy products              113.7             10.5                9             23.4               21             33.9               30
  Fluid milk....................            33.7              4.0               12              6.8               20             10.8               32
  Other dairy products..........            80.0              6.5                8             16.6               21             23.0               29
      Meat, poultry, and fish              183.1              8.1                4             38.9               21             47.0               26
  Meat..........................           113.7              5.1                4             25.7               23             30.8               27
  Poultry.......................            62.2              2.4                4             10.9               18             13.3               21
  Fish and seafood..............             7.2              0.6                8              2.2               31              2.8               39
                         Eggs               15.5              1.1                7              4.0               26              5.1               33
        Tree nuts and peanuts               25.8              1.5                6              2.3                9              3.8               15
   Added sugar and sweeteners              193.0             21.2               11             58.0               30             79.3               41
          Added fats and oils              282.1             60.2               21             47.8               17            108.0               38
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................         1,175.8            142.3               12            244.5               21            386.9               33
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).

Figure 3: Estimated total number of calories of food loss in the United 
        States per day by food group, 2010

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: ERS (2012a).

                 Table 6: Estimated daily per capita calories of food loss at the retail and consumer levels in the United States, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Losses from food supply b
                                 -----------------------------------------------------------------------------------------------------------------------
            Commodity              Food  Supply a             Retail level                     Consumer level           Total retail and  consumer level
                                 -----------------------------------------------------------------------------------------------------------------------
                                      Calories          Calories         Percent          Calories         Percent          Calories         Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Grain products                881              106               12              166               19              271               31
                        Fruit                120               10                8               28               24               38               32
  Fresh.........................              63                7               11               21               33               28               44
  Processed.....................              57                3                6                7               13               11               19
                   Vegetables                170               12                7               33               19               45               26
  Fresh.........................              72                6                9               22               30               28               39
  Processed.....................              97                6                6               11               11               17               17
               Dairy products                367               34                9               75               21              109               30
  Fluid milk....................             109               13               12               22               20               35               32
  Other dairy products..........             258               21                8               53               21               74               29
      Meat, poultry, and fish                591               26                4              126               21              152               26
  Meat..........................             367               16                4               83               23               99               27
  Poultry.......................             201                8                4               35               18               43               21
  Fish and seafood..............              23                2                8                7               31                9               39
                         Eggs                 50                3                7               13               26               16               33
        Tree nuts and peanuts                 83                5                6                7                9               12               15
   Added sugar and sweeteners                623               69               11              187               30              256               41
          Added fats and oils                911              194               21              154               17              349               38
                                 -----------------------------------------------------------------------------------------------------------------------
    Total.......................           3,796              460               12              789               21            1,249               33
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Food supply at the retail level, which is the foundation for the retail- and consumer-level loss stages in the loss-adjusted data series.
b Totals may not add due to rounding.
Per capita losses at the retail and consumer levels for each commodity (not shown) were estimated by multiplying the quantity of that commodity
  available for consumption by the appropriate loss assumption. Individual loss estimates were then multiplied by the U.S. population and summed up into
  their respective food groups and retail or consumer levels.
Source: ERS (2012a) and the U.S. population on July 1, 2010 (309.75 million).

Discussion
    In 2010, an estimated 133 billion pounds of food at the retail and 
consumer levels in the United States went uneaten, and this amount is 
valued at $161.6 billion using retail prices. This amount of food loss 
translates into 141 trillion calories in 2010. These estimates suggest 
that annual food loss in the United States is substantial.
    As with any research with quantitative values, the resulting 
estimates produced here may be low or high. ERS food loss estimates 
could be low for various reasons. Many foods are not included in the 
system (e.g., soybeans, soy milk, and coconut milk) and so losses for 
these foods are not counted. Additionally, the LAFA data series 
suggests that the average American consumed 2,547 calories per day in 
2010, which is high even considering the prevalence of obesity in the 
United States, implying that the estimated food loss is low or that 
there are other issues. The LAFA estimates are also higher than the 
energy requirements of most age cohorts as determined by the Institute 
of Medicine ((IOM), 2005), further suggesting that the ERS food loss 
estimates are conservative. Hall, et al. (2009) suggest that the loss 
estimates from the LAFA estimate are low and/or that the assumptions of 
a roughly constant proportion of food waste are becoming progressively 
worse over time (p. 3).\14\ Hall, et al. (2009), however, do not offer 
suggestions on how to obtain better estimates of food loss, and the 
study predates the incorporation of new consumer-level loss estimates 
from Muth, et al. (2011) into the LAFA data series in August 2012. 
Also, the estimated $161.6 billion of food loss was calculated using 
retail prices. Had we used foodservice prices (which are typically 
higher), then the estimated value of food loss would have been higher.
---------------------------------------------------------------------------
    \14\ Hall, et al. (2009) write that ``food waste has progressively 
increased from about 30 percent of the available food supply in 1974 to 
almost 40 percent in recent years'' using the Food and Agriculture 
Organization's balance sheets. By contrast, what they call the `USDA' 
food waste estimate (calculated by subtracting the USDA food 
availability data adjusted for spoilage and wastage from the FAO food 
supply data) is an approximately constant proportion of the total food 
supply. They conclude that ``while the USDA estimate of food waste was 
within 5 percent of our calculation in 1974, it was 25 percent too low 
in 2003.''
---------------------------------------------------------------------------
    There are several reasons why the ERS food loss estimates could be 
high. Some of the individual loss estimates may be high, particularly 
at the retail level. The ERS food loss estimates assume that food loss 
has no residual value or economic use. But in reality, there may be a 
residual use if the food loss is diverted to another economic use, such 
as for animal feed or to create energy.\15\ That is, by redirecting 
food for use as energy inputs, for example, less food or other inputs 
would need to be purchased from other sources for these purposes. In 
essence, if data had been available on the amount of food diverted to 
lower value uses and on the economic value of these uses, then the ERS 
estimate of the total amount of food loss could have been adjusted 
downwards. However, data limitations preclude these refinements. The 
U.S. Environmental Protection Agency (EPA) has developed a food waste 
hierarchy of preferred uses for available food that goes unconsumed by 
people (see box, ``EPA's Food Recovery Hierarchy''). It is possible 
that some of the factors that might cause the estimates to be high or 
low could cancel each other out.
---------------------------------------------------------------------------
    \15\ As an aside, these uses of the food waste may harm the 
environment less than landfilling or incinerating the food waste. Here, 
the creation of energy using food waste does not include corn used for 
ethanol, which was already removed as a direct industrial use of corn 
in the supply and disappearance (i.e., use) balance sheets.
---------------------------------------------------------------------------
    There is a practical limit to how much food loss the United States 
can prevent or reduce given technical and spatial factors; consumers' 
tastes, preferences, and food habits; and economic factors. Therefore, 
the amount of food loss that could be prevented or reduced will be less 
than the ERS food loss estimates. Nevertheless, these updated estimates 
are a unique contribution to the literature and are useful in providing 
perspective to the issue of food loss in the United States.
  EPA's Food Recovery Hierarchy
          The U.S. Environmental Protection Agency (EPA) endorses its 
        food recovery hierarchy, where the ideal situation would be to 
        reduce the production of food waste at the source. When food 
        waste is generated, the first preference is to recover 
        wholesome food from all points in the food production, 
        marketing, and consumption chain to feed people who are food-
        insecure. Providing food for livestock, zoo animals, and pets 
        would be the second best option, followed by recycling food and 
        food waste for industrial purposes. These three options would 
        help conserve resources and reduce food waste disposal costs. 
        For example, the feasibility of anaerobic digesters that use 
        feedstock, food and agricultural waste, and wastewater plant 
        biosolids to produce biogas fuel and other valuable outputs 
        (e.g., compost material) is being explored in developed 
        countries.
  Food recovery hierarchy

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: http://www.epa.gov/osw/conserve/materials/organics/
        food/fd-gener.htm#food-hier.

          Composting food to improve soil fertility is a relatively 
        low-priority option, and its use is not widespread in the 
        United States. However, some cities, counties, and State 
        agencies are investigating the benefits of curbside collection 
        of residential food waste (e.g., in bins or compostable kitchen 
        bags) to compost with collected yard trimmings. According to 
        the EPA (2009), there were around 3,510 community composting 
        programs in operation in the United States in 2008, so 
        expanding these to incorporate food waste might be a viable 
        option. The last resort should be using landfills and 
        incinerators to dispose of food waste because of the negative 
        impacts on the environment. These impacts are partly offset if 
        energy is created during incineration and landfilling (e.g., 
        tapping the methane gas).
Appendix--The ERS Loss-Adjusted Food Availability Data and Calculation 
        Details for the Amount and Value of Food Loss
    Since 2005, the updated Food Availability (Per Capita) Data system 
has had three separate but related data series that each look 
differently at the food available for consumption in the United States. 
The first series, the Food Availability data, is the foundation for the 
other two series: (1) the Nutrient Availability data \16\ and (2) the 
Loss-Adjusted Food Availability (LAFA) data (formerly called the Food 
Guide Pyramid Servings data). This loss-adjusted series is the 
foundation of this report and is essentially the Food Availability data 
adjusted for food spoilage and other losses to more closely approximate 
actual per capita intake (http://www.ers.usda.gov/data-products/food-
availability-(per-capita)-data-system/loss-adjusted-food-availability-
documentation.aspx). The primary purpose of the LAFA data is to 
estimate daily per capita food intake and present this information in 
two forms: the number of calories consumed daily and the number of food 
pattern equivalents consumed daily.\17\ Here, we use the embedded food 
loss assumptions to estimate food loss at the retail and consumer 
levels for 2010 using the LAFA data as of September 2012.
---------------------------------------------------------------------------
    \16\ This nutrient series is compiled by USDA's Center for 
Nutrition Policy and Promotion (CNPP) in what it calls the Nutrient 
Content of the U.S. Food Supply and is outside the scope of this 
report.
    \17\ These food pattern equivalents were formerly called the Food 
Guide Pyramid serving the 2005 Dietary Guidelines for Americans and its 
supporting MyPyramid Plan Food Guidance System.
---------------------------------------------------------------------------
Construction of the Core Food Availability Data
    In essence, the Food Availability data measure the use of basic 
commodities--such as wheat, beef, and shell eggs--produced at the farm 
level or an early stage of processing and available for human 
consumption. They do not measure food use of highly processed foods--
such as bakery products, frozen dinners, and soups--in their finished 
form. Ingredients of highly processed foods, however, are included as 
components of less processed foods such as sugar, flour, fresh 
vegetables, and meat.
    The Food Availability data series is based on records of annual 
commodity flows from production to end uses. This involves the 
development of supply and disappearance (i.e., ``supply and use'') 
balance sheets for each major commodity from which human foods are 
produced. In general, the total annual available supply of each 
commodity consists of the sum of production, imports, and beginning 
stocks. These three components are either directly measured or 
estimated by government agencies using sampling and statistical 
methods. From this total supply, exports, ending stocks, and total 
measurable nonfood uses are subtracted. For most commodity categories, 
measurable nonfood uses are farm inputs (feed and seed) and industrial 
uses. In a few cases, supplies for human food use are measured directly 
and one of the other use components becomes the residual. This is the 
case for wheat, in which flour production is measurable and available 
from manufacturers' reports on flour milling and, therefore, use for 
livestock feed becomes the residual.
    Per capita food availability is calculated by dividing the annual 
total food supply for a specific year by the U.S. total resident 
population plus Armed Forces overseas for that same year. Yearly 
population estimates are from the U.S. Census Bureau. For commodities 
not shipped overseas in substantial amounts, such as fluid milk and 
cream, ERS uses the resident population as the base. No adjustments are 
made for changes in the demographic makeup of the population.
Construction of the Loss-Adjusted Food Availability Data
    The current ERS per capita Food Availability data were converted 
into daily per capita food pattern equivalents comparable to those 
identified in Federal dietary recommendations using a multistage 
process. Each commodity was assigned to one of five major food groups 
(fruit, vegetables, meat, dairy, and grains) or to one of two 
additional groups for discretionary added fats and oils and added 
sugar/sweeteners. The core Food Availability data were adjusted for 
spoilage and other losses by subtracting estimated losses from the 
``primary'' weight reported in the data series to create the Loss-
Adjusted Food Availability data series. Depending on the commodity, 
loss was estimated at up to three different stages in the marketing 
system (i.e., farm-to-retail, retail, and consumer). ERS calculates 
summary estimates of food loss for each commodity in the Loss-Adjusted 
Food Availability data series at the retail and consumer levels. 
Although the data system also takes into account food losses between 
the farm and retailer, ERS cannot calculate summary estimates of food 
loss between the farm and retailer because of data limitations for some 
of the food groups. Onfarm or pre-harvest losses, such as from hail 
damage on a field crop, are not included in the system. Inedible 
portions of all foods--seeds, pits, and inedible peels--were also 
subtracted from the data, and thus the loss-adjusted food availability 
estimates and the food loss estimates do not include inedible parts. 
For example, estimates for meat, poultry, and fish are provided as 
boneless weight. The data were converted from pounds per capita per 
year to grams (or ounces) per capita per day to be comparable with 
Federal dietary recommendations.
Estimation Details for this Report
    Given the recent and growing interest in food loss and waste 
domestically (e.g., U.S. Food Waste Challenge), up-to-date estimates on 
the magnitude of food loss in the United States are timely. This report 
updates the ERS loss estimates to 2010 and extends previous ERS 
estimates and publications on food loss in several important ways, such 
as incorporating new consumer-level loss assumptions and providing 
calorie estimates for the first time.
    We used prices consumers would have paid, on average, for foods if 
bought at retail. In total, we compiled estimates of the amount and 
value of food loss for more than 200 individual foods in the Loss-
Adjusted Food Availability (LAFA) data and then aggregated these values 
to estimate the total value of food loss at both the retail and 
consumer levels in the United States in 2010 and the value by food 
group. The analytical method for calculating the amount, value, and 
calories of food loss for each commodity in the LAFA data consisted of 
five key steps.
    First, we identified the individual commodities in the LAFA data 
for our analysis by each food group. In particular, we identified 62 
fresh and processed fruit, 67 fresh and processed vegetables, and 86 
other individual foods in the LAFA data for our analysis (see Appendix 
Box). The LAFA data can be accessed online through Excel spreadsheets 
that provide all of the current loss assumptions and the structure of 
the calculations for each food in the data series. More information on 
the LAFA data is summarized on the ERS website (ERS, 2011).
    Second, we estimated national average retail prices in 2010 using 
Nielsen Homescan data for each individual commodity in the LAFA data 
series consumed at home in 2010. This method for determining average 
prices was used in previous research (e.g., Reed, et al. (2004), 
Stewart, et al. (2011), Buzby, et al. (2011), and Buzby and Hyman 
(2012)). Members of the Homescan consumer panel in 60,648 households 
reported the foods they purchased, the quantities they bought, and the 
prices they paid. The data include purchases at retail outlets--such as 
supercenters, grocery stores, farmers' markets, mass merchandisers, and 
drugstores--but not at restaurants or other foodservice outlets. This 
means that foods consumed away from home are not included in our 
estimated prices. Nielsen further provides projection factors that 
allow data users to estimate what all households across the United 
States paid for foods and the quantities they bought.
  Commodity Coverage in the 2010 Loss-Adjusted Food Availability Data
          The ``Dairy'' spreadsheet has 34 commodities--Plain whole 
        milk, Plain 2-percent milk, Plain 1-percent milk, Skim milk, 
        Whole flavored milk, Low-fat flavored milk, Buttermilk, 
        Refrigerated yogurt, Cheddar cheese, Other American cheese, 
        Provolone cheese, Romano cheese, Parmesan cheese, Mozzarella 
        cheese, Ricotta cheese, Other Italian cheese, Swiss cheese, 
        Brick cheese, Muenster cheese, Blue cheese, Other miscellaneous 
        cheese, Regular cottage cheese, Low-fat cottage cheese, Regular 
        ice cream, Low-fat ice cream (ice milk), Frozen yogurt and 
        other miscellaneous frozen products, Evaporated and condensed 
        canned whole milk, Evaporated and condensed bulk whole milk, 
        Evaporated and condensed bulk and canned skim milk, Dry whole 
        milk, Nonfat dry milk, Dry buttermilk, Dairy share of half-and-
        half, and Dairy share of eggnog.
          The ``Fats'' spreadsheet has 15 commodities--Added fats and 
        oils, Butter, Margarine, Lard, Edible beef tallow, Shortening, 
        Salad and cooking oils, Other edible fats and oils, Dairy fats, 
        Fat share of half and half, Light cream, Heavy cream, Sour 
        cream, Cream cheese, and Fat share of eggnog.
          The ``Fruit'' spreadsheet has 62 commodities--Fresh oranges, 
        Fresh tangerines, Fresh grapefruit, Fresh lemons, Fresh limes, 
        Fresh apples, Fresh apricots, Fresh avocados, Fresh bananas, 
        Fresh blueberries, Fresh cantaloupe, Fresh cherries, Fresh 
        cranberries, Fresh grapes, Fresh honeydew, Fresh kiwifruit, 
        Fresh mangoes, Fresh papaya, Fresh peaches, Fresh pears, Fresh 
        pineapple, Fresh plums, Fresh strawberries, Fresh watermelon, 
        Canned apples and applesauce, Canned apricots, Canned sweet 
        cherries, Canned tart cherries, Canned peaches, Canned pears, 
        Canned pineapple, Canned plums, Canned olives, Frozen 
        blackberries, Frozen blueberries, Frozen raspberries, Frozen 
        strawberries, Other frozen berries, Frozen apples, Frozen 
        apricots, Frozen sweet cherries, Frozen tart cherries, Frozen 
        peaches, Frozen plums and prunes, Other frozen fruit, Dried 
        apples, Dried apricots, Dried dates, Dried figs, Dried peaches, 
        Dried pears, Dried plums, Raisins, Grapefruit juice, Lemon 
        juice, Lime juice, Orange juice, Apple juice, Cranberry juice, 
        Grape juice, Pineapple juice, and Prune juice.
          The ``Grain'' spreadsheet has 9 commodities--White and whole 
        wheat flour, Durum flour, Rice, Rye flour, Corn flour and meal, 
        Corn hominy and grits, Corn starch, Barley products, and Oat 
        products.
          The ``Meat'' spreadsheet has 24 commodities--Beef, Veal, 
        Pork, Lamb, Chicken, Turkey, Fresh and frozen fish, Fresh and 
        frozen shellfish, Canned salmon, Canned sardines, Canned tuna, 
        Canned shellfish, Other canned fish, Cured fish, Eggs, Peanuts, 
        Almonds, Hazelnuts (filberts), Pecans, Walnuts, Macadamia nuts, 
        Pistachio nuts, Other tree nuts, and Coconut.
          The ``Sugar'' spreadsheet has 6 commodities--Cane and beet 
        sugar, High fructose corn sweetener, Glucose, Dextrose, Honey, 
        and Edible syrups.
          The ``Vegetable'' spreadsheet has 67 commodities--Fresh 
        artichokes, Fresh asparagus, Fresh bell peppers, Fresh 
        broccoli, Fresh Brussels sprouts, Fresh cabbage, Fresh carrots, 
        Fresh cauliflower, Fresh celery, Fresh collard greens, Fresh 
        sweet corn, Fresh cucumbers, Fresh eggplant, Fresh escarole and 
        endive, Fresh garlic, Fresh kale, Fresh head lettuce, Fresh 
        Romaine and leaf lettuce, Fresh lima beans, Fresh mushrooms, 
        Fresh mustard greens, Fresh okra, Fresh onions, Fresh potatoes, 
        Fresh pumpkin, Fresh radishes, Fresh snap beans, Fresh spinach, 
        Fresh squash, Fresh sweet potatoes, Fresh tomatoes, Fresh 
        turnip greens, Canned asparagus, Canned snap beans, Canned 
        cabbage (sauerkraut), Canned carrots, Canned sweet corn, Canned 
        cucumbers (pickles), Canned green peas, Canned mushrooms, 
        Canned chile peppers, Canned potatoes, Canned tomatoes, Other 
        canned vegetables, Frozen asparagus, Frozen snap beans, Frozen 
        broccoli, Frozen carrots, Frozen cauliflower, Frozen sweet 
        corn, Frozen green peas, Frozen lima beans, Frozen potatoes, 
        Frozen spinach, Miscellaneous frozen vegetables, Dehydrated 
        onions, Dehydrated potatoes, Potato chips and shoestring 
        potatoes, Dry peas and lentils, Dry edible beans, Dry black 
        beans, Dry great northern beans, Dry lima beans, Dry navy 
        beans, Dry pinto beans, Dry red kidney beans, and Other dry 
        beans.
          Total: 215 commodity categories.* Some of these categories, 
        such as ``other frozen fruit,'' include more than one commodity 
        so there are more than 215 commodities in total represented in 
        the Food Availability Data System.
---------------------------------------------------------------------------
    * Two commodities (eggnog; half-and-half) were split into a dairy 
share and a fat share. To avoid double counting, we reduce the sum 
(217) of the above groups to 215.
    Source: Computed by Jeanine Bentley, ERS, August 6, 2012.

    Third, as a validation step, when our estimates fell outside of the 
expected range, we examined the data more closely to determine if there 
had been computational errors or outliers. Additionally, it is likely 
that some households made mistakes when reporting information to 
Nielsen or, because the recording process is time-consuming, failed to 
report some purchases. However, validation studies confirm the 
suitability of Homescan data. For example, Einav, et al. (2008) found 
that errors in the Homescan data are of the same order of magnitude as 
reporting errors in major government-collected data sets. Moreover, 
their findings suggest that errors in Homescan data are unlikely to 
affect estimates of average prices paid by all households.
    Fourth, we multiplied the estimated price by the annual amount of 
food loss for each individual food in the LAFA data series at the 
retail and consumer levels. The amounts of loss for each type of 
commodity were calculated by multiplying per capita quantities 
available at each level by the corresponding food loss assumptions and 
by the U.S. population on July 1, 2010 (309.75 million). We then 
estimated the total value of losses by summing individual valuations 
over each commodity group in the LAFA data series.
    Fifth, we estimated the number of calories representing food loss 
in 2010 for each commodity in the LAFA data series. One strength of 
this data series is that it estimates the calories available for each 
commodity in a given year. Using this information with the retail- and 
consumer-level loss estimates, we were able to estimate the number of 
calories from the food supply at both levels that went uneaten.
    We basically followed the same steps as used in Buzby and Hyman 
(2012) and Buzby, et al. (2011), with a few exceptions:

  1.  For five fresh vegetables, we used specific consumer price 
            indexes (CPIs) to inflate the 2006 Nielsen fresh vegetable 
            prices to 2010 prices [2006 was the most recent year 
            available]. In particular, we used the lettuce CPI for 
            fresh romaine and leaf lettuce. For fresh broccoli, sweet 
            corn, cucumbers, and spinach, we used the CPI for ``other 
            fresh vegetables,'' which is for fresh vegetables other 
            than for potatoes, lettuce, and tomatoes. In the earlier 
            two articles, we inflated the 2006 fresh prices with the 
            CPI value for all fresh vegetables from the U.S. Bureau of 
            Labor Statistics (BLS).

  2.  For fresh apricots, there were enough observations of fresh 
            apricots in the 2010 Nielsen Homescan data that there was 
            no need to adjust from an earlier price as in Buzby, et al. 
            (2011).

  3.  For veal, Buzby and Hyman (2012) used fresh veal only from 2008 
            Nielsen data to estimate the 2008 price for veal. In this 
            report, we used both fresh and frozen veal together.
Limitations of the Data
    As with the basic Food Availability data, the Loss-Adjusted Food 
Availability data series does not measure actual consumption or the 
quantities ingested. This is because neither series is based on direct 
observations of individual intake. Therefore, data are not available by 
socioeconomic, demographic, and geographic (State, regional, or city) 
breakdowns, and in most cases, it is not known if such data exist. 
Detailed documentation is available on ERS's website (ERS, 2012a).
    The limited ability of researchers to measure food loss accurately 
suggests that actual loss rates may differ from the assumptions used in 
this data series. In general, the underlying estimates of farm-to-
retail (not measured in this report), retail, and consumer-level food 
losses used in the Loss-Adjusted Food Availability data series may be 
understated or overstated due to limitations in the underlying 
published studies. Food loss, particularly at the consumer level, is by 
nature difficult to measure accurately. Participants in household 
surveys on food waste tend to be highly ``reactive''--changing their 
behavior during the survey period instead of acknowledging how much 
food they typically discard--or misstating their true levels of product 
discard (Gallo, 1980). Studies that observe food loss by inspecting 
landfill garbage are also prone to errors. Such studies are not 
nationally representative and may not account for food fed to pets and 
other animals, put in garbage disposals, or composted at home (Gallo, 
1980). Plate waste studies, such as for schoolchildren at lunchtime 
(Buzby and Guthrie, 2002), often target only a slice of the total U.S. 
population, and the findings cannot be easily or reliably extrapolated 
to other demographic categories.
    Food loss for individual commodities, in particular, may vary over 
time. There are good reasons why food loss for a particular commodity 
could increase or decrease. On the one hand, new food technologies and 
food production/processing practices may reduce food losses over time 
(e.g., improvements in the preservation of bread, nanotechnologies in 
food packaging to reduce spoilage) (Buzby, 2010). On the other hand, 
food loss for a particular commodity could increase, such as from 
greater trimming of food to cut down on fats. However, the ERS data 
currently do not capture most of these changes in food loss because for 
most commodity- and food-loss-level pairings, the same loss assumption 
is applied throughout the span of the data in the LAFA data series 
(e.g., the retail-level loss estimate for fresh apples is the same 8.6 
percent over 1970-2011). The exception is that the retail-level loss 
estimates for beef account for greater trimming of fat over time.
    Additionally, ERS's LAFA data series uses well-documented data for 
inedible loss assumptions, but these amounts are not consistently 
applied to the data series in the same step or level. In particular, 
the data series removes the inedible share for fresh fruits, fresh 
vegetables, and eggs at the consumer level while the inedible shares 
for meat, poultry, and fish are removed at the primary-to-retail level, 
so that these estimates in the LAFA data series are presented in 
boneless weight.\18\ What this means, in effect, is that for fresh 
fruits, fresh vegetables, and eggs, the inedible share is included at 
the retail weight but then subtracted prior to the consumer weight.
---------------------------------------------------------------------------
    \18\ In the ERS Food Availability Data system, the weight at the 
primary distribution level is dictated for each commodity by the 
structure of the marketing system and data availability. In most cases, 
the primary weight is the farm weight. For meat and poultry, the 
primary weight is the carcass weight, which is then converted to a 
boneless weight when accounting for farm-to-retail losses.
---------------------------------------------------------------------------
    Despite the limitations, both the per capita Food Availability data 
and the per capita Loss-Adjusted Food Availability data are useful for 
economic analyses because they serve as indirect measures of trends in 
food consumption and food loss. In other words, both data series 
provide an indication of whether Americans, on average, are consuming 
more or less of various foods over time. As we have seen in this 
report, the Loss-Adjusted Food Availability series also provides 
estimates of food loss by commodity, by food group, and in total.
References

 
 
 
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 From Field to Fork-Curbing Losses and Wastage in the Food Chain.''
 Stockholm International Water Institute (SIWI) Policy Brief. Stockholm,
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    Muth, M.K., S.A. Karns, S.J. Nielsen, J.C. Buzby, and H.F. Wells.
 2011. ``Consumer-Level Food Loss Estimates and Their Use in the ERS
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    Parfitt, J.P., M. Barthel, and S. Macnaughton. 2010. ``Food Waste
 within Food Supply Chains: Quantification and Potential for Change to
 2050.'' Philosophical Transactions of the Royal Society Biological
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    Quested, T., and A. Parry. 2011. ``New Estimates for Household Food
 and Drink Waste in the UK.'' Oxon, Waste & Resources Action Programme
 (WRAP).
    Reed, J., E. Frazao, and R. Itskowitz. 2004. How Much Do Americans
 Pay for Fruits and Vegetables? Economic Research Service, U.S.
 Department of Agriculture, Agricultural Information Bulletin No. 790
 (July).
    Ribaudo, M., Jorge Delgado, L. Hansen, M. Livingston, R. Mosheim,
 and J. Williamson. 2011. Nitrogen in Agricultural Systems: Implications
 for Conservation Policy, Economic Research Service, U.S. Department of
 Agriculture, Economic Research Report No. 127 (Sept.) www.ers.usda.gov/
 publications/err-economic-research-report/err127.aspx.
    Rosen, S., B. Meade, S. Shapouri, A. D'Souza, and N. Rada. 2012.
 International Food Security Assessment, 2012-12. Economic Research
 Service (ERS), U.S. Department of Agriculture.
    Schwab, J. 2013, Environmental Protection Agency. Personnel
 communication with J. Buzby, Washington, DC.
    Stewart, H., J. Hyman, J. Buzby, E. Frazao, and A. Carlson. 2011.
 How Much do Fruits and Vegetables Cost? Economic Research Service, U.S.
 Department of Agriculture. Economic Information Bulletin No. 71 (Feb.),
 http://www.ers.usda.gov/publications/eib-economic-information-bulletin/
 eib71.aspx.
    Sullivan, P., D. Hellerstein, L. Hansen, R. Johansson, S. Koenig, R.
 Lubowski, W. McBride, D. McGranahan, M. Roberts, S. Vogel, and S.
 Bucholtz. 2004. The Conservation Reserve Program: Economic Implications
 for Rural America. Economic Research Service, U.S. Department of
 Agriculture, Agricultural Economic Report No. 834 (Oct.),
 www.ers.usda.gov/publications/aer-agricultural-economic-report/
 aer834.aspx.
    United Nations (UN). 2011. World Population Prospects, the 2010
 Revision. Department of Economic and Social Affairs, P.D., Population
 Estimates and Projections Section, ed., Rome, United Nations.
    Venkat, K. 2012. ``The Climate Change and Economic Impacts of Food
 Waste in the United States,'' International Journal on Food System
 Dynamics, 2, 431-446.
    Webber, M.E. 2012. ``More Food, Less Energy,'' Scientific American,
 pp. 74-79.
    Ziegler, G., and J.D. Floros. 2011. ``A Future Perspective to
 Mitigate Food Losses: The Role of Food Science and Technology,'' IFT
 2011 Annual Meeting & Food Expo (New Orleans, LA).
 

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Winning on Reducing Food Waste
The initiative
    The Winning on Reducing Food Waste Initiative (the Initiative) is a 
collaborative effort announced in a joint agency formal agreement 
(https://www.usda.gov/sites/default/files/documents/usda-fda-epa-
formal-agreement.pdf) (PDF, 579 KB) signed in October 2018 by the U.S. 
Department of Agriculture (USDA), the U.S. Environmental Protection 
Agency (EPA), and the U.S. Food and Drug Administration (FDA).
    Through the Initiative, the agencies affirm their shared commitment 
to reduce food loss and waste. They also agree to coordinate action to 
leverage government resources to reduce food loss and waste, including 
action to educate Americans on the impacts and importance of reducing 
food loss and waste.
    Individually and collectively, these agencies contribute to the 
Initiative, encourage long-term reductions and work toward the goal of 
reducing food loss and waste in the United States. These actions 
include research, community investments, education and outreach, 
voluntary programs, public-private partnerships, tool development, 
technical assistance, event participation, and policy discussion.
FY 2019-2020 Federal Interagency Strategy
    To achieve the vision for the Initiative, the agencies developed a 
strategy to prioritize and coordinate their efforts. In development of 
this strategy, the agencies built on information from several sources, 
including, but not limited to:

   Managing for Results: Key Considerations for Implementing 
        Interagency Collaborative Mechanisms (https://www.gao.gov/
        products/GAO-12-1022) (U.S. Government Accountability Office). 
        This report highlights two key elements for successful 
        collaboration: (1) clarity of roles and responsibilities and 
        (2) written guidance and agreements.

   A Call to Action by Stakeholders: United States Food Loss 
        and Waste Reduction Goal (https://www.epa.gov/sustainable-
        management-food/call-action-stakeholders-united-states-food-
        loss-waste-2030-reduction) developed by the EPA in consultation 
        with USDA. The key activities identified by stakeholders in 
        this report include: seek prevention strategies and use the 
        Food Recovery Hierarchy; increase public awareness; improve the 
        data; forge new partnerships and expand the existing ones; 
        clarify date labels and food safety; and build food loss and 
        waste infrastructure.

   A Roadmap to Reduce U.S. Food Waste by 20 Percent (https://
        www.refed.com/downloads/ReFED_Report_2016.pdf) (PDF, 12 MB) 
        (Rethink Food Waste through Economics and Data (ReFED)). The 
        report finds that the most cost-effective solutions are: (1) 
        standardized date labeling and (2) consumer education 
        campaigns.

   Don't Waste, Donate: Enhancing Food Donations through 
        Federal Policy (https://www.nrdc.org/sites/default/files/dont-
        waste-donate-report.pdf) (PDF, 3 MB) (Harvard Food Law and 
        Policy Clinic and Natural Resources Defense Council). 
        Recommendations in this report include: (1) enhance liability 
        protections for food donations; (2) standardize and clarify 
        expiration date labels; and (3) publish food safety guidance 
        for food donations.

    The strategy prioritizes six action areas:

          Priority Area 1: Enhance Interagency Coordination

          Improving interagency coordination will enable USDA, EPA and 
        FDA to use government resources more efficiently and 
        effectively. An interagency, collaborative mechanism will be 
        established to reduce programmatic redundancies and leverage 
        complimentary activities.

          Priority Area 2: Increase Consumer Education and Outreach 
        Efforts

          Households are a major source of food loss and waste in the 
        United States. Most consumers are unaware of the consequences 
        of food loss and waste. A coordinated consumer education effort 
        by USDA, EPA and FDA, in conjunction with public, private or 
        nonprofit partners, has the potential to raise awareness, 
        motivate consumers to take action and accelerate progress to 
        reduce food loss and waste.

          Priority Area 3: Improve Coordination and Guidance on Food 
        Loss and Waste Measurement

          Enhanced coordination and voluntary guidance regarding 
        measurement of food loss and waste will reduce confusion and 
        help establish clearer goals and strategies. Improved and 
        coordinated methodologies can identify missed opportunities and 
        better communicate progress.

          Priority Area 4: Clarify and Communicate Information on Food 
        Safety, Food Date Labels, and Food Donations

          Confusion about food safety guidelines, date labels and food 
        donation results in food loss and waste at retailers and in 
        homes across the country. Establishing and communicating 
        clearer, coordinated voluntary guidance on food date labels and 
        liability protection around food donation could help increase 
        food recovery and lead to reductions in food waste and food 
        insecurity.

          Priority Area 5: Collaborate with Private Industry to Reduce 
        Food Loss and Waste Across the Supply Chain

          The food industry, including processors, manufacturers, 
        distributors, retailers and foodservice establishments, has an 
        important role in reducing food loss and waste. Showcasing and 
        building partnerships through efforts such as the USDA/EPA U.S. 
        Food Loss and Waste 2030 Champions, as well as connecting 
        stakeholders with food waste reduction technologies, will help 
        stimulate further efforts throughout the food supply chain.

          Priority Area 6: Encourage Food Waste Reduction by Federal 
        Agencies in their Respective Facilities

          Federal facilities operate food service venues, including 
        cafeterias and concessions, and manage events. Encouraging the 
        reduction of food loss and waste at these facilities and events 
        will demonstrate Federal leadership and implementation of the 
        administration's priorities.

    Winning on Reducing Food Waste FY 2019-2020 Federal Interagency 
Strategy (https://www.usda.gov/sites/default/files/documents/
interagency-strategy-on-reducing-food-waste.pdf) (PDF, 364 KB)
Federal Interagency Strategy--inventory of initiative actions
    USDA, EPA and FDA, in conjunction with public, private and 
nonprofit partners, have an ongoing inventory of actions (https://
www.usda.gov/sites/default/files/documents/usda-epa-fda-agency-
inventory-priority-areas.pdf) (PDF, 337 KB) in response to the 
initiative's six priority areas.
                             [attachment 6]
Winnning on Reducing Food Waste--FY 2019-2020 Federal Interagency 
        Strategy
April 2019
EPA 530-F-19-1004

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Overview

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          [A family shopping.]

    In the United States, 30-40 percent of all available food goes 
uneaten through loss or waste. Food is the single largest type of waste 
in our daily trash. The Federal Government has a role to play in 
reducing food loss and waste because food loss and waste adversely 
impacts food security, the economy, our communities and the 
environment.
    As a result, in October 2018, the U.S. Department of Agriculture 
(USDA), the U.S. Environmental Protection Agency (EPA) and the U.S. 
Food and Drug Administration (FDA) launched the Winning on Reducing 
Food Waste Initiative (the Initiative).
    As part of the Initiative, the agencies affirm their shared 
commitment to work towards the national goal of reducing food loss and 
waste by 50 percent by 2030. The agencies agree to coordinate food loss 
and waste actions such as: education and outreach, research, community 
investments, voluntary programs, public-private partnerships, tool 
development, technical assistance, event participation and policy 
discussion on the impacts and importance of reducing food loss and 
waste.
    To achieve the vision for the Initiative, the agencies developed a 
strategy to prioritize and coordinate their efforts. In development of 
this strategy, the agencies built on information from several sources, 
including, but not limited to:

   Managing for Results: Key Considerations for Implementing 
        Interagency Collaborative Mechanisms (https://www.gao.gov/
        products/GAO-12-1022) (U.S. Government Accountability Office). 
        This report highlights two key elements for successful 
        collaboration: (1)clarity of roles and responsibilities and (2) 
        written guidance and agreements.

   A Call to Action by Stakeholders: United States Food Loss 
        and Waste Reduction Goal (https://www.epa.gov/sustainable-
        management-food/call-action-stakeholders-united-states-food-
        loss-waste-2030-reduction) developed by EPA inconsultation with 
        USDA. The key activities identified by stakeholders in this 
        report include: (1) seek preventionstrategies and use the Food 
        Recovery Hierarchy; (2) increase public awareness; (3) improve 
        the data; (4) forge newpartnerships and expand the existing 
        ones; (5) clarify date labels and food safety; and (6) build 
        food loss and wasteinfrastructure.

   A Roadmap to Reduce U.S. Food Waste (https://www.refed.com/
        downloads/ReFED_Report_2016.pdf) (Rethink Food Waste through 
        Economics and Data (ReFED)). The report findsthat the most 
        cost-effective solutions are: (1) standardized date labeling 
        and (2) consumer education campaigns.

   Don't Waste, Donate: Enhancing Food Donations through 
        Federal Policy (https://www.nrdc.org/sites/default/files/dont-
        waste-donate-report.pdf) (Harvard Food Law and Policy Clinic 
        andNatural Resources Defense Council). Recommendations in this 
        report include: (1) enhance liability protections for food 
        donations; (2) standardize and clarify expiration date labels; 
        and (3) publish food safety guidance for food donations.
The Strategy Prioritizes Six Action Areas:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  Priority Area 1: Enhance Interagency Coordination

                  Improving interagency coordination will enable USDA, 
                EPA and FDA to use government resources more 
                efficiently and effectively. An interagency, 
                collaborative mechanism will be established to reduce 
                programmatic redundancies and leverage complementary 
                activities.
                
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                
                    Priority Area 2: Increase Consumer Education and 
                Outreach Efforts

                  Households are a major source of food loss and waste 
                in the United States. Most consumers are unaware of the 
                consequences of food loss and waste. A coordinated 
                consumer education effort by USDA, EPA and FDA, in 
                conjunction with public, private, or nonprofit 
                partners, has the potential to raise awareness, 
                motivate consumers to take action and accelerate 
                progress to reduce food loss and waste.
                
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                
                    Priority Area 3: Improve Coordination and Guidance 
                on Food Loss and Waste Measurement

                  Enhanced coordination and voluntary guidance 
                regarding measurement of food loss and waste will 
                reduce confusion and help establish clearer goals and 
                strategies. Improved and coordinated methodologies can 
                identify missed opportunities and better communicate 
                progress.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                
                    Priority Area 4: Clarify and Communicate 
                Information on Food Safety, Food Date Labels, and Food 
                Donations

                  Confusion about food safety guidelines, date labels, 
                and food donation results in food loss and waste at 
                retailers and in homes across the country. Establishing 
                and communicating clearer, coordinated voluntary 
                guidance on food date labels and liability protection 
                around food donation could help increase food recovery 
                and lead to reductions in food waste and food 
                insecurity.
                
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                
                    Priority Area 5: Collaborate with Private Industry 
                to Reduce 
                 Food Loss and Waste Across the Supply Chain

                  The food industry, including processors, 
                manufacturers, distributors, retailers and food service 
                establishments, has an important role in reducing food 
                loss and waste. Showcasing and building partnerships 
                through efforts such as the USDA/EPA U.S. Food Loss and 
                Waste 2030 Champions, as well as connecting 
                stakeholders with food waste reduction technologies, 
                will help stimulate further efforts throughout the food 
                supply chain.
                
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                
                    Priority Area 6: Encourage Food Waste Reduction by 
                Federal 
                 Agencies in their Respective Facilities

                  Federal facilities operate food service venues, 
                including cafeterias and concessions, and manage 
                events. Encouraging the reduction of food loss and 
                waste at these facilities and events will demonstrate 
                Federal leadership and implementation of the 
                administration's priorities.
                             [attachment 7]
                             
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Agriculture Innovation as a Solution for Farmers, Consumers, and the 
        Environment
February 2020

    American agriculture is environmentally sound, economically viable, 
and consumer focused, and its success is due to the United States' 
open-arms approach to innovation. The Agriculture Innovation Agenda 
(AIA) is the United States Department of Agriculture's (USDA) 
commitment to the continued success of American farmers, ranchers, 
producers, and foresters in the face of future challenges. It is a 
department-wide effort to align USDA's resources, programs, and 
research to provide farmers with the tools they need and to position 
American Agriculture as a leader in the effort to meet the food, fiber, 
fuel, feed, and climate demands of the future. We will also continue 
working to modernize our regulatory framework so America's producers 
will have the benefit of modern technologies, such as biotechnology, 
necessary to meet these challenges. USDA will stimulate innovation so 
that American agriculture can achieve the goal of increasing U.S. 
agricultural production by 40 percent while cutting the environmental 
footprint of U.S. agriculture in half by 2050.

    To help achieve this goal, USDA commits to:

    I. Create a comprehensive U.S. agriculture innovation strategy to 
align public and private research efforts:

   Bold and transformative innovation is needed to meet future 
        demands. We will seek input from the agricultural community on 
        what innovative technologies and practices are needed to meet 
        these demands. We will use that input to seek alignment between 
        the research goals of the scientific and innovation communities 
        with the demand for tangible and relevant outcomes.

   Over the next year, USDA will:

     Utilize innovation breakthrough opportunities derived 
            from the 2019 National Academies ofScience report, Science 
            Breakthroughs to Advance Food and Agricultural Research by 
            2030, toform the basis for a forthcoming USDA Request for 
            Information (RFI) on the most importantinnovation 
            opportunities to be addressed in the near and long-term. 
            The focus will be on transformational innova tion 
            opportunities defining the next era of agriculture 
            productivity and environmental conservation. We encourage 
            stakeholders to provide input on how these exciting science 
            and technology developments hold potential for agriculture 
            in the future. USDA will offer technical assistance for 
            workshops to gather this feedback.

     Using input provided, identify common themes across 
            the agriculture customer base to inform research and 
            innovation efforts in the Department, the broader public-
            sector, and the private sector.

    II. Integrate the latest innovative conservation technologies and 
practices into USDA programs:

    There have been dramatic advances in efficiency and conservation 
performance over the past two decades. USDA can assist farmers in 
accessing and adopting new technologies and practices to help producers 
meet productivity and environmental goals. To accomplish this, the 
Department will focus on USDA program delivery to encourage rapid 
adoption of cutting-edge technologies and practices. USDA will also 
champion commercialization of innovative technologies in the private 
sector

   Over the next year, USDA will:

     Improve internal coordination in order to facilitate 
            transmission of best approaches among USDA research and 
            program agencies and identify, customize, and fast-track 
            the best emerging innovative technologies to integrate and 
            deliver to our customers through USDA programs.

     Develop standardized OneUSDA processes, including a 
            ``fast pass'' process for immediate in-take and integration 
            of proven technologies.

     Work with existing regional outreach networks and 
            other partnerships to identify innovation opportunities in 
            order to rapidly integrate the latest technologies into our 
            programs and understand how those technologies can best 
            serve our customers.

     Solicit and encourage development of the best ``ready-
            to-go'' innovative technology from the private sector.

    III. Improve USDA Data Collection and Reporting:

    USDA currently collects a wealth of data on commodity production, 
but information on how our food is produced and the conservation 
practices being employed is harder to come by. USDA intends to increase 
our understanding of the adoption of conservation practices and improve 
the timeliness and access to conservation information, delivering a 
powerful new tool to measure and track progress. Through improved 
reporting and access to conservation data, USDA and the public will be 
able to understand and monitor conservation and productivity trends and 
progress. Access to this information will also serve as a catalyst for 
innovation and improved conservation decision-making.

   Over the next year, USDA will:

     Review the array of data we're collecting on 
            conservation practices, and make improvements to 
            conservation reporting systems to identify:

         The most useful data for tracking progress towards 
            goals;

         Gaps in the data that USDA currently collects that 
            prevent large-scale 
                trend analysis in production and conservation adoption 
            trends;

         Improvements in data collection and reporting;

         Trends in production and conservation adoption;

         The effects of conservation on natural resources; and

         The most useful data for tracking food loss and waste.

     USDA will recommend improvements to conservation 
            reporting systems which will be regularly updated, 
            leveraging data from existing USDA surveys. This new 
            reporting will contain timely and detailed trend data on 
            agricultural conservation adoption, as well as production, 
            to track progress toward meeting our goals.

   Hold Ourselves Accountable with Benchmarks: USDA has 
        outlined benchmarks to hold us accountable as we stimulate 
        innovation so that American agriculture can achieve the goal of 
        increasing U.S. agricultural production by 40 percent while 
        cutting the environmental footprint of U.S. agriculture in half 
        by 2050. This will be an on-going effort toward meeting the 
        demands of the future.

   Agricultural productivity: Increase agricultural production 
        by 40 percent by 2050 to do our part to meet estimated future 
        demand.

   Forest Management: Build landscape resiliency by investing 
        in active forest management and forest restoration through 
        increased Shared Stewardship Agreements with States.

   Food loss and waste: Advance our work toward the United 
        States' goal to reduce food loss and waste by 50 percent in the 
        United States by the year 2030, from the 2010 baseline.

   Carbon Sequestration and Greenhouse Gas: Enhance carbon 
        sequestration through soil health and forestry, leverage the 
        agricultural sector's renewable energy benefits for the 
        economy, and capitalize on innovative technologies and 
        practices to achieve a net reduction of the agricultural 
        sector's current carbon footprint by 2050 without regulatory 
        overreach.

     Multiple pathways exist to achieve this goal, 
            including promoting innovation and new technologies and 
            practices to improve fertilizer and manure management, 
            capturing biogas, improving livestock production 
            efficiency, conserving sensitive and marginal lands to 
            enhance carbon sinks, reforestation and responsible forest 
            management to prevent wildfire, maximizing the benefits of 
            renewable energy through improved efficiency and carbon 
            capture, and encouraging soil health practices such as no-
            till to sequester carbon.

   Water Quality: Reduce nutrient loss by 30 percent nationally 
        by 2050.

     Address the areas with the greatest needs.

     Support existing watershed goals.

   Renewable Energy: Support renewable fuels, including 
        ethanol, biodiesel, and biomass.

     Increase biofuel feedstock production and biofuel 
            production efficiency and competitiveness to achieve 
            market-driven blend rates of E15 in 2030 and E30 in 2050. 
            Achieve market-driven demand for biomass and biodiesel.

                             [attachment 8]
                             
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Food Product Dating
          ``Best if Used By'' is a type of date you might find on a 
        meat, poultry, or egg product label. Are dates required on 
        these food products? Does it mean the product will be unsafe to 
        use after that date? Here is some background information 
        answering these and other questions about product dating.
What is Food Product Dating?
    Two types of product dating may be shown on a product label. ``Open 
Dating'' is a calendar date applied to a food product by the 
manufacturer or retailer. The calendar date provides consumers with 
information on the estimated period of time for which the product will 
be of best quality and to help the store determine how long to display 
the product for sale. ``Closed Dating'' is a code that consists of a 
series of letters and/or numbers applied by manufacturers to identify 
the date and time of production.
Does Federal Law Require Food Product Dating?
    Except for infant formula, product dating is not required by 
Federal regulations.\1\
---------------------------------------------------------------------------
    \1\ The U.S. Food and Drug Administration requires a ``use by'' 
date on infant formula. The U.S. Department of Agriculture (USDA) does 
not require quality or food safety date labels for products under its 
purview. However, the USDA does require a ``pack date'' for poultry 
products and thermally processed, commercially sterile products to help 
identify product lots and facilitate trace-back activities in the event 
of an outbreak of foodborne illness (see 9 CFR 381.126 and 431.2(e), 
respectively).
---------------------------------------------------------------------------
    For meat, poultry, and egg products under the jurisdiction of the 
Food Safety and Inspection Service (FSIS), dates may be voluntarily 
applied provided they are labeled in a manner that is truthful and not 
misleading and in compliance with FSIS regulations.\2\ To comply, a 
calendar date must express both the month and day of the month. In the 
case of shelf-stable and frozen products, the year must also be 
displayed. Additionally, immediately adjacent to the date must be a 
phrase explaining the meaning of that date such as ``Best if Used By.''
---------------------------------------------------------------------------
    \2\ 9 CFR 317.8, 381.129, and 590.411.
---------------------------------------------------------------------------
Are Dates for Food Safety or Food Quality?
    Manufacturers provide dating to help consumers and retailers decide 
when food is of best quality. Except for infant formula, dates are not 
an indicator of the product's safety and are not required by Federal 
law.
How do Manufacturers Determine Quality Dates?
    Factors including the length of time and the temperature at which a 
food is held during distribution and offered for sale, the 
characteristics of the food, and the type of packaging will affect how 
long a product will be of optimum quality. Manufacturers and retailers 
will consider these factors when determining the date for which the 
product will be of best quality.
    For example, sausage formulated with certain ingredients used to 
preserve the quality of the product or fresh beef packaged in a 
modified atmosphere packaging system that helps ensure that the product 
will stay fresh for as long as possible. These products will typically 
maintain product quality for a longer period of time because of how the 
products are formulated or packaged.
    The quality of perishable products may deteriorate after the date 
passes; however, such products should still be safe if handled 
properly. Consumers must evaluate the quality of the product prior to 
its consumption to determine if the product shows signs of spoilage.
What Types of Food are Dated?
    Open dating is found on most foods including meat, poultry, egg and 
dairy products. ``Closed or coded dates'' are a series of letters and/
or numbers and typically appear on shelf-stable products such as cans 
and boxes of food.
What Date-Labeling Phrases are Used?
    There are no uniform or universally accepted descriptions used on 
food labels for open dating in the United States. As a result, there 
are a wide variety of phrases used on labels to describe quality dates.
    Examples of commonly used phrases include:

   A ``Best if Used By/Before'' date indicates when a product 
        will be of best flavor or quality. It is not a purchase or 
        safety date.

   A ``Sell-By'' date tells the store how long to display the 
        product for sale for inventory management. It is not a safety 
        date.

   A ``Use-By'' date is the last date recommended for the use 
        of the product while at peak quality. It is not a safety date 
        except for when used on infant formula as described below.

   A ``Freeze-By'' date indicates when a product should be 
        frozen to maintain peak quality. It is not a purchase or safety 
        date.
What Date-Labeling Phrase does FSIS Recommend?
    USDA estimates that 30 percent of the food supply is lost or wasted 
at the retail and consumer levels.\3\ One source of food waste arises 
from consumers or retailers throwing away wholesome food because of 
confusion about the meaning of dates displayed on the label. To reduce 
consumer confusion and wasted food, FSIS recommends that food 
manufacturers and retailers that apply product dating use a ``Best if 
Used By'' date. Research shows that this phrase conveys to consumers 
that the product will be of best quality if used by the calendar date 
shown. Foods not exhibiting signs of spoilage should be wholesome and 
may be sold, purchased, donated and consumed beyond the labeled ``Best 
if Used By'' date.
---------------------------------------------------------------------------
    \3\ http://www.usda.gov/oce/foodwaste/sources.htm.
---------------------------------------------------------------------------
Are Foods Safe to Eat After the Date Passes?
    With an exception of infant formula (described below), if the date 
passes during home storage, a product should still be safe and 
wholesome if handled properly until the time spoilage is evident (Chill 
Refrigerate Promptly (https://www.foodsafety.gov/keep/basics/chill/
index.html)). Spoiled foods will develop an off odor, flavor or texture 
due to naturally occurring spoilage bacteria. If a food has developed 
such spoilage characteristics, it should not be eaten.
    Microorganisms such as molds, yeasts, and bacteria can multiply and 
cause food to spoil. Viruses are not capable of growing in food and do 
not cause spoilage. There are two types of bacteria that can be found 
on food: pathogenic bacteria, which cause foodborne illness, and 
spoilage bacteria, which do not cause illness but do cause foods to 
deteriorate and develop unpleasant characteristics such as an 
undesirable taste or odor making the food not wholesome. When spoilage 
bacteria have nutrients (food), moisture, time, and favorable 
temperatures, these conditions will allow the bacteria to grow rapidly 
and affect the quality of the food. Food spoilage can occur much faster 
if food is not stored or handled properly. A change in the color of 
meat or poultry is not an indicator of spoilage (The Color of Meat and 
Poultry).
What are the Requirements for Dating Infant Formula?
    Federal regulations require a ``Use-By'' date on the product label 
of infant formula under inspection of the U.S. Food and Drug 
Administration (FDA). Consumption by this date ensures the formula 
contains not less than the quantity of each nutrient as described on 
the label. Formula must maintain an acceptable quality to pass through 
an ordinary bottle nipple.
    The ``Use-By'' date is selected by the manufacturer, packer or 
distributor of the product on the basis of product analysis throughout 
its shelf life, tests, or other information. It is also based on the 
conditions of handling, storage, preparation, and use printed on the 
label. Do not buy or use baby formula after its ``Use-By'' date.
What Do Can Codes Mean?
    Can codes are a type of closed dating which enable the tracking of 
product in interstate commerce. These codes also enable manufacturers 
to rotate their stock and locate their products in the event of a 
recall.
    Can codes appear as a series of letters and/or numbers and refer to 
the date the product was canned. The codes are not meant for the 
consumer to interpret as a ``Best if Used By'' date.
    Cans must exhibit a code or the date of canning. Cans may also 
display ``open'' or calendar dates. Usually these are ``Best if Used 
By'' dates for peak quality. Discard cans that are dented, rusted, or 
swollen. High-acid canned foods (e.g., tomatoes and fruits) will keep 
their best quality for 12 to 18 months. Whereas, low-acid canned foods 
(e.g., meats and vegetables) will keep for two to five years. 
Additional information on food canning and the handling of canned foods 
may be found at Shelf-Stable Food Safety (http://www.fsis.usda.gov/wps/
portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-
sheets/safe-food-handling/shelf-stable-food-safety/ct_index).
Can Food be Donated After the Date Passes?
    Yes. The quality of perishable products may deteriorate after the 
date passes but the products should still be wholesome if not 
exhibiting signs of spoilage. Food banks, other charitable 
organizations, and consumers should evaluate the quality of the product 
prior to its distribution and consumption to determine whether there 
are noticeable changes in wholesomeness (Food Donation Safety Tips 
(http://www.fda.gov/Food/ResourcesForYou/Consumers/ucm197835.htm)).
What do the Dates on Egg Cartons Mean?
    Use of either a ``Sell-By'' or ``Expiration'' (EXP) date is not a 
Federal regulation, but may be required, as defined by the egg laws in 
the state where the eggs are marketed. Some state egg laws do not allow 
the use of a ``sell-by'' date.
    Many eggs reach stores only a few days after the hen lays them. Egg 
cartons with the USDA grade shield on them must display the ``pack 
date'' (the day that the eggs were washed, graded, and placed in the 
carton). This number is a three-digit code that represents the 
consecutive day of the year starting with January 1 as 001 and ending 
with December 31 as 365. When a ``sell-by'' date appears on a carton 
bearing the USDA grade shield, the code date may not exceed 30 days 
from the date of pack.
    After purchasing eggs, it is recommended to refrigerate them in 
their original carton and place them in the coldest part of the 
refrigerator, not in the door due to loss of coolness from repeated 
opening of the door.
Why are there Bar Codes on Food Packages?
    A Universal Product Code (UPC) is a type of barcode that appears on 
packages as black lines of varying widths above a series of numbers. 
They are not required by regulation, but manufacturers print them on 
most product labels because scanners at supermarkets can ``read'' them 
quickly to record the price at checkout. UPC codes are also used by 
stores and manufacturers for inventory purposes and marketing 
information. When read by a computer, a UPC can reveal such specific 
information as the manufacturer's name, product name, size of product 
and price. The numbers are not used to identify recalled products.
    A Stock Keeping Unit (SKU) code is a number assigned to a product 
by a company or retailer for stock-keeping purposes and internal 
operations. A particular product may have different SKUs if sold by 
different companies or retailers.
How does Date Labeling Impact Food Waste?
    Confusion over the meaning of dates applied to food products can 
result in consumers discarding wholesome food.
    In an effort to reduce food waste, it is important that consumers 
understand that the dates applied to food are for quality and not for 
safety. Food products are safe to consume past the date on the label, 
and regardless of the date, consumers should evaluate the quality of 
the food product prior to its consumption.
Where can I find Information on the Proper Handling of Food?
    If foods are mishandled, before or after the date on the package, 
bacteria, including pathogenic bacteria that can cause foodborne 
illness, can quickly multiply. For example, if cold chicken salad is 
taken to a picnic and left out at temperatures higher than 40 F (4.4 
C) for more than two hours (one hour if temperatures are 
90 F (32.2 C) or higher), the product should not be consumed. Other 
examples of potential mishandling are meat and poultry products that 
have been defrosted improperly or handled by people who don't practice 
good sanitation. Make sure to follow the handling and preparation 
instructions on the label to ensure top quality and safety. Additional 
information on safe food handling practices in the home can be found at 
Check Your Steps: Food Safe Families (http://www.fsis.usda.gov/wps/
portal/fsis/topics/food-safety-education/teach-others/fsis-educational-
campaigns/check-your-steps) and The Big Thaw (http://www.fsis.usda.gov/
wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-
fact-sheets/safe-food-handling/the-big-thaw-safe-defrosting-methods-
for-consumers/CT_Index).
Food Safety Questions?

 
 
 
Call the USDA Meat & Poultry Hotline toll-free at 1-888-MPHotline (1-888-
                                674-6854)
The Hotline is open year-round and can be reached from 10 a.m. to 6 p.m.
                  (Eastern Time) Monday through Friday.
                 E-mail questions to [email protected].
  Consumers with food safety questions can also ``Ask Karen'', the FSIS
                         virtual representative.
                     Available 24/7 at AskKaren.gov.
 

                             [attachment 9]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

July 6, 2020

  Hon. Collin C. Peterson,
  Chairman,
  Committee on Agriculture,
  U.S. House of Representatives,
  Washington, D.C.

    Dear Mr. Chairman:

    Sections 1401 (a) and (b) of the Agriculture Improvement Act of 
2018 provide that the U.S. Department of Agriculture (USDA) shall 
report on: (a) whether the average feed cost used by a dairy operation 
to produce a hundredweight of milk (as calculated by USDA monthly) is 
representative of actual dairy feed costs; and (b) the costs incurred 
by dairy operations in the use of corn silage as feed and the 
difference between the feed cost of corn silage and the feed cost of 
corn. As required by the statute, the enclosed report provides these 
analyses.
    If you have questions, please have a member of your staff contact 
the Office of Congressional Relations at (202) 720-7095. A similar 
letter is being sent to Ranking Member K. Michael Conaway.
            Sincerely,

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Sonny Perdue,
Secretary.
                               enclosure
Agriculture Improvement Act of 2018_Dairy Margin Coverage Section 1401 
        (a) and (b) Report to Congress
June 17, 2020
U.S. Department of Agriculture
Table of Contents
    Executive Summary
    Background
    Sec. 1401(a): Does the DMC calculated average cost of feed reflect 
actual dairy feed costs?

          Comparison of Alternative Dairy Feed Cost Estimates with the 
        Statutory Formula-Based Estimate Published by FSA
          University and State Department of Agriculture Budgets
          Additional Perspective on Dairy Feed Costs

    Sec. 1401(b): What are the costs incurred by dairy operations for 
use of corn silage for feed and what is the difference between the feed 
costs of corn silage and corn?

          No Formal Market or Prices Exist for Corn Silage
          Additional Corn Silage Background
          The Difference Between Feed Costs of Corn and Corn Silage
          Examining the ``Homegrown'' Component of Silage Costs

    References
    Appendix--Statutory Language from the Agriculture Improvement Act 
of 2018
    Tables

          Table 1: Comparison of Alternative Dairy Feed Cost Estimates 
        with the Statutory Formula-Based Estimate Published by FSA
          Table 2: University Extension and State Estimates of Dairy 
        Feed Costs
          Table 3: Feed Cost of Corn Silage and Corn as Estimated by 
        USDA's ARMS
          Appendix: Component-Based Tabulation ARMS Estimates of Dairy 
        Feed Costs, Measured in Dollars per Hundredweight of Milk 
        Produced

    Figures

          Figure 1: Feed Cost Shares and Dairy Margin in Dollars per 
        Hundredweight of Milk as Calculated Monthly by USDA for DMC 
        (and formerly, MPP-Dairy)
          Figure 2: U.S. Production of Corn Silage vs. Alfalfa Hay
          Figure 3: Feed Prices of Main Dairy Cost Factors
Executive Summary
    Section 1401 of the Agriculture Improvement Act of 2018 requires 
that the U.S. Department of Agriculture (USDA) evaluate: (1) whether 
the rate used in the Dairy Margin Coverage (DMC) program to represent 
an average dairy operation's costs to produce a hundredweight of milk 
(as calculated by USDA monthly) is representative of actual dairy feed 
costs; (2) the costs incurred by dairy operations in the use of corn 
silage as feed; and (3) the difference between the feed cost of corn 
silage and the feed cost of corn. Key findings include:
    For (1):

          USDA's Economic Research Service (ERS) publishes national 
        U.S. Milk Production Costs and Returns Estimates based on dairy 
        producer responses to questions asked in USDA's Agricultural 
        Resource Management Survey (ARMS). For 2016, the base year used 
        in this report, the ERS published estimate indicates a national 
        average feed cost of $9.35 per hundredweight of milk produced. 
        As an alternative, a feed component-specific tabulation of 
        responses to questions in the ARMS was developed. This feed-
        component specific tabulation provides a cost estimate of $9.20 
        per hundredweight for 2016.
          The average monthly feed cost calculated for the DMC program 
        using the required statutory formula was $8.04 per 
        hundredweight for calendar 2016. This rate was calculated as 
        the simple average of the monthly prices of feed components 
        published by USDA's Farm Service Agency (FSA) on the DMC 
        webpage for calendar 2016.
          A 95-percent confidence interval around the published ERS 
        estimate for 2016 provides a range of $8.97 to $9.73 per 
        hundredweight; the 95-percent confidence interval for the 
        component-specific ARMS result is similar, at $8.83 to $9.58 
        per hundredweight. The value generated from the statutory 
        formula, $8.04 per hundredweight, does not fall within either 
        of these 95-percent confidence interval ranges.
          Although not directly comparable to the ARMS data, twelve 
        illustrative university and State Department of Agriculture 
        budgets are also provided in the report. They are often 
        prepared using a panel of producers, aim to be representative 
        (but may skew toward producers who are better managers and more 
        likely to participate in such panels), and are intended for 
        producer use as a guide for planning and decision-making. They 
        are also often used by bankers to benchmark individual 
        producer's cash flow. Unlike the ARMS estimates, they are 
        typically neither statistically based nor do they reflect the 
        United States as a whole and are thus are not sufficient for 
        influencing national policymaking.

    For (2) and (3):

   The corn silage market is regional and thinly traded and any 
        prices that are available are not representative nationally. 
        The vast majority of corn silage is fed on the farm where it is 
        grown or on nearby operations. Unlike corn, it is a bulky 
        product that is not amenable to long-distance transport.

   The difference between the feed cost of corn silage (which 
        is valued as a source of forage and energy) and the feed cost 
        of corn are a function of corn prices and alfalfa availability. 
        Alfalfa production and use in rations has fallen for some time, 
        while corn silage use has increased.

   In the current economic environment, when market prices of 
        corn are low, the relative costs of using homegrown silage in 
        the dairy ration are higher compared with operations that 
        purchase feed. This was not always the case: when market prices 
        were much higher (such as from 2008-13), operations using 
        homegrown corn and silage had a relative cost advantage.
Background
    The Agriculture Improvement Act of 2018 (the 2018 Farm Bill) 
authorized the Dairy Margin Coverage (DMC) program, a voluntary risk 
management program for dairy producers. DMC replaces the Margin 
Protection Program for Dairy (MPP-Dairy), which was authorized by the 
Agricultural Act of 2014 (the 2014 Farm Bill). DMC offers protection to 
dairy producers when the difference between the national all-milk price 
and the national average statutory formula-driven feed cost (the 
margin) falls below a certain dollar amount coverage level selected by 
the producer.\1\ Individual producer margins may be above or below the 
statutory formula-driven margin.
---------------------------------------------------------------------------
    \1\ For details on the program and how it operates, see: https://
www.fsa.usda.gov/news-room/fact-sheets/index (scroll to the dairy 
section for the DMC Fact Sheet).
---------------------------------------------------------------------------
    Section 1401 of the 2018 Farm Bill DMC requires that USDA evaluate: 
(1) whether the rate used in the Dairy Margin Coverage (DMC) program to 
represent an average dairy operation's costs to produce a hundredweight 
of milk (as calculated by USDA monthly) is representative of actual 
dairy feed costs; (2) the costs incurred by dairy operations in the use 
of corn silage as feed; and (3) the difference between the feed cost of 
corn silage and the feed cost of corn.\2\ This report addresses these 
issues.
---------------------------------------------------------------------------
    \2\ See Appendix for the statutory language.
---------------------------------------------------------------------------
Sec. 1401(a): Does the DMC calculated average cost of feed reflect 
        actual dairy feed costs?
    Every month, USDA uses a formula specified in the 2014 Farm Bill to 
calculate the average cost of feed used by a dairy operation to produce 
a hundredweight of milk for use in implementing the Farm Service Agency 
(FSA) dairy program (currently, DMC). This statutory formula was 
developed with input from the National Milk Producers Federation (NMPF) 
in conjunction with prominent animal scientists and dairy nutritionists 
(National Milk Producers Federation, 2010; Ishler, 2014). While the 
rations that dairy farmers feed cows vary across the United States 
depending on the availability and type of feed, the statutory formula 
includes only corn, alfalfa hay, and soybean meal. These feeds are the 
traditional mainstays of dairy rations, providing the main essential 
nutrients.
    The statutory formula USDA uses to calculate the feed costs 
associated with producing a hundredweight (one hundred pounds) of milk 
monthly is:

  (Eqn. 1) 1.0728*Corn Price ($/bu.) + 0.0137*Alfalfa Hay Price ($/ton) 
    + 0.00735*Soybean Meal Price ($/ton)

rounded to the nearest cent. In developing this fixed-coefficient 
ration, Congress used a formula originally designed to reflect the feed 
costs on a 1,000-cow milking operation producing 56.39 pounds of milk 
per cow daily (National Milk Producers Federation, 2010; Ishler, 2014; 
Newton and Hutjens, 2015).\3\ Newton and Hutjens (2015) also note that 
Congress considered the cost of the program when determining the 
formula set forth in the 2014 Farm Bill to calculate feed costs for the 
Dairy Margin Protection Program (the precursor program to DMC).
---------------------------------------------------------------------------
    \3\ For 2019, U.S. milk production averaged 64.1 pounds per cow per 
day. Technological advancements and better management practices have 
improved the yield per cow steadily since 2015. However, the 64.1 
pounds per day represents an average across all herd sizes with yields 
lower for smaller farms. Much of the increase in overall productivity 
is due to technological and management improvements and not greater 
feed use.
---------------------------------------------------------------------------
    The feed components and the coefficients of the formula were not 
changed in the 2018 Farm Bill with the introduction of DMC. However, 
USDA made one change in the calculation since 2014. That change 
occurred in July 2019 when the price used for the ``alfalfa hay'' 
component switched from using a single alfalfa hay price to using a 50/
50 split between the alfalfa hay price and a ``premium and supreme 
alfalfa hay price.'' This change to the price of alfalfa hay was made 
to reflect higher-quality roughage use. The ``premium and supreme 
alfalfa hay'' price is calculated monthly by USDA's National 
Agricultural Statistics Service based on survey data for the top five 
milk producing States, as measured by volume of milk produced during 
the previous month.\4\
---------------------------------------------------------------------------
    \4\ The May 2020 Agricultural Prices report can be found at https:/
/downloads.usda.library.cornell.edu/usda-esmis/files/c821gj76b/
jm2159057/qv33sh51q/agpr
0520.pdf. The premium and supreme alfalfa hay data are found on p. 16.
---------------------------------------------------------------------------
    USDA calculates the DMC feed cost monthly using corn and alfalfa 
prices obtained from USDA's National Agricultural Statistics Service 
(NASS) and the soybean meal price obtained from USDA's Agricultural 
Marketing Service (AMS); the data and resulting margin are posted on 
the Farm Service Agency website.\5\
---------------------------------------------------------------------------
    \5\ Calculated feed costs, the all-milk price, and the DMC margin 
can be found at: https://www.fsa.usda.gov/programs-and-services/dairy-
margin-coverage-program/index.
---------------------------------------------------------------------------
Comparison of Alternative Dairy Feed Cost Estimates with the Statutory 
        Formula-Based Rate Published by FSA
    To assess whether the statutory rate used in the DMC program (as 
shown in Eqn. 1) is representative of ``actual'' dairy feed costs, this 
report uses estimates of ``actual'' dairy feed costs produced by USDA's 
Economic Research Service (ERS) using the Agricultural Resource 
Management Survey (ARMS). ARMS is USDA's primary source of information 
on the production practices, resource use, and economic well-being of 
America's farms and ranches and is used to calculate average feed cost 
per hundredweight of milk. ARMS is a multi-frame, stratified producer 
survey, and each year, farms in one or more commodity specializations 
are over-sampled in order to produce cost and returns estimates. ARMS 
data are the only source currently available by which to estimate 
nationally representative feed cost components.\6\
---------------------------------------------------------------------------
    \6\ Note that feed use in USDA ``balance sheets'' (and reflected in 
USDA's monthly World Agricultural Supply and Demand Estimates) is a 
residual reflecting the difference between total availability and other 
measured use categories (such as official U.S. data on exports). There 
are no government surveys capturing feed use or costs in aggregate or 
by animal type other than the ARMS.
---------------------------------------------------------------------------
    ARMS estimates reflect a detailed breakout of costs, while the 
statutory formula shown in Eqn. 1 represents the costs associated with 
the main categories of feed and serves as a practical policy indicator. 
The commodity-focused ARMS components are conducted every 5 years, with 
the most recent survey for dairy reflecting 2016 data.\7\
---------------------------------------------------------------------------
    \7\ For the 2016 ARMS Dairy Questionnaire, visit: https://
www.ers.usda.gov/webdocs/DataFiles/52816/
W%5E2016%5EDairy%5EPhase3%20Questionnaire%5EQ%5ECOP_FOH.pdf?v
=8074.4.
---------------------------------------------------------------------------
    Two different ARMS-related estimates are compared to the results 
using the statutory-based formula. Both estimates were produced using 
methods consistent with normal ERS practice for working with ARMS data 
and are commonly recognized as statistically valid for the purpose of 
estimating nationally representative dairy costs. The estimates used 
are:

   Published ERS estimate from the U.S. Milk Production Costs 
        and Returns Estimates (available at https://www.ers.usda.gov/
        data-products/commodity-costs-and-returns.aspx). This data 
        series is the official Federal source for estimates of national 
        commodity-specific costs and returns and is published annually 
        for a wide variety of agricultural commodities. This report 
        uses the official dairy cost estimate for 2016. It was 
        developed using the dairy version of the 2016 ARMS 
        questionnaire that asked producers: (1) how much was spent for 
        purchased feed for livestock and poultry, following up with (2) 
        how much of the purchased feed cost was specifically for the 
        dairy enterprise. Homegrown harvested and grazed feed expenses 
        were also included. The 2016 survey contained 1,526 dairy 
        observations.

   Component-specific tabulation of ARMS estimates--This 
        estimate was created specifically for this report in order to 
        provide a nationally-representative estimate of the average 
        cost of corn, alfalfa hay, protein supplements (of which 
        soybean meal is a major component),\8\ and other components 
        used for dairy feed. This estimate used detailed feed use 
        questions, by component purchased or harvested, that appear 
        later in the ARMS and provides a different cost perspective for 
        comparison with the statutory rate used in the DMC program. 
        Some respondents did not answer questions about individual 
        purchased feed components and those observations were dropped. 
        Then, the observations were re-weighted to reflect both 
        purchased and home-grown feed and encompass individual feed 
        components--hay (alfalfa) and straw; corn silage; corn and 
        other grains; protein supplements; and distillers or brewers' 
        grain. This tabulation uses 1,079 of the total 1,526 milk cost 
        and returns observations in the 2016 survey. See Appendix table 
        for details.
---------------------------------------------------------------------------
    \8\ The ARMS dairy survey does not explicitly list soybean meal as 
a feed type but captures this feed component is in the ``protein 
supplements'' category.

    These estimates are compared against the statutory rate calculated 
using the formula shown in Eqn. 1 and published on the FSA website at 
https://www.fsa.usda.gov/programs-and-services/dairy-margin-coverage-
program/index in the ``Final Feed Costs'' column. The ``Final Feed 
Costs'' entries for each month of the year were summed for each 
calendar year and divided by twelve to obtain the average annual feed 
cost.
    As shown in Table 1, the statutory formula rates posted by FSA are 
consistently lower than the ARMS-based estimates. A 95-percent 
confidence interval around the published ERS estimate for 2016 provides 
a range of $8.97 to $9.73 per hundredweight; the range for the 
component-specific ARMS result is similar, at $8.83 to $9.58 per 
hundredweight. The $8.04 per hundredweight, using the statutory 
formula, does not fall within either of these 95-percent confidence 
interval ranges.

  Table 1: Comparison of Alternative Dairy Feed Cost Estimates with the
            Statutory Formula-Based Estimate Published by FSA
------------------------------------------------------------------------
                      2016  $/         2017 \1\  $/       2018 \1\  $/
                   hundredweight      hundredweight      hundredweight
------------------------------------------------------------------------
Published ERS                 9.35               9.25               9.92
 U.S. Milk
 Costs and
 Returns
 Estimates
Unpublished ERS               9.20               9.10               9.76
 component-
 specific ARMS
 estimates
(3) Statutory                 8.04               7.92               8.64
 formula rate
 published by
 FSA (shown in
 Eqn. 1)
------------------------------------------------------------------------
\1\ NASS Agricultural Prices indexes for feed concentrates and hay and
  forage are used to extrapolate feed cost estimates for 2017 and 2018.
  See https://www.ers.usda.gov/data-products/milk-cost-of-production-
  estimates.aspx.

University and State Department of Agriculture Budgets
    Although not directly comparable to the ARMS data, twelve 
illustrative university and State Department of Agriculture budgets are 
provided in Table 2.\9\ They are prepared by university extension 
economists and the California State Department of Food and Agriculture 
and are regional by nature. These budgets are often prepared using a 
panel of producers, aim to be representative (but may skew toward 
producers who are better managers and more likely to participate in 
such panels), and are intended for producer use as a guide for planning 
and decision-making. They are also often used by bankers to benchmark 
individual producer's cash flow. Unlike the ARMS estimates, they are 
typically neither statistically based nor do they reflect the United 
States as a whole and are thus are not sufficient for influencing 
national policymaking.
---------------------------------------------------------------------------
    \9\ These example budgets were selected to illustrate the variation 
in cost estimates available from State and university sources.
---------------------------------------------------------------------------
Additional Perspective on Dairy Feed Costs
    Figure 1 shows the monthly corn, alfalfa, and soybean meal costs as 
used to calculate the DMC (and earlier, the MPP-Dairy) margin (the 
difference between the monthly all-milk price and the calculated feed 
cost). For 2016-2019, total feed costs were in the $7.50-$9.00 range 
for many months, although they were slightly higher in 2019. (In 2019, 
the alfalfa hay category was modified to add premium and supreme hay.) 
Large variations in the DMC margin--as shown by the yellow line--are 
exclusively due to volatility in the all-milk price.
    While dairy diets can differ by region and herd size, all diets use 
forage, grain, and protein as major feed components, along with salt 
and minerals. For example, a 2016 USDA study found that 92.0 percent of 
all U.S. dairy operations fed lactating or dry cows alfalfa hay/
haylage; 89.4 percent fed corn silage; 76.9 percent fed soybeans 
(whole, meal, or hulls); and 90.3 percent fed corn (whole, meal, 
cracked or flaked) (USDA/APHIS). Similarly, Linn, et al. (2018) and 
Dairy-Cattle.extension.org (2019) indicate that alfalfa hay is the main 
source of forage, corn is the dominant grain for dairy cows, and 
soybean meal is a major source of protein.
    As the dairy sector is growing increasingly sophisticated, so too 
are the management practices used. The 2016 USDA/APHIS study indicates 
that about 70 percent of small and medium operators fed all of their 
lactating cows the same ration, while over half of large operations 
tailored their feed ration based on the stage of lactation. The use of 
an independent nutritionist to balance rations increased as herd size 
increased, as did the likelihood of the operation feeding cottonseed, 
wet brewers/distillers grains, canola, wheat, straw, or blood meal. 
Smaller operations were more likely to feed clover, soybeans, or oats. 
Overall, 20 percent of lactating cows and 34 percent of dry cows had 
some pasture access--which was considerably more common on small 
operations.
    Regardless of the size or location of the operation, dairy 
producers shift product use within the forage, grain, and protein 
categories to achieve nutrient equivalence at least cost. Because they 
are nutritionally equivalent, the prices of like products in each 
category are closely related to the prices of alfalfa hay, corn, and 
soybean meal. For example, some farmers might not have access to 
alfalfa hay and, as a result, feed their cows substitutes such as corn 
silage or other haylage grown on their farms. Corn silage is a partial 
substitute for alfalfa hay and is an important source of energy; in 
practice, its economic value is typically expressed relative to corn 
used for grain.

            Table 2: University Extension and State Estimates of Dairy Feed Costs (cost/cwt of milk)
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Measure                                    Univ. of Idaho    Univ. of Idaho    Univ. of Idaho       Univ. of
                                            2,500 Cow \1\    120 Jersey Cow     5,000 Cow \3\      Minnesota 223
                                                                   \2\                              Cow Farm \4\
----------------------------------------------------------------------------------------------------------------
Year                                                  2012              2014              2014              2018
----------------------------------------------------------------------------------------------------------------
  Alfalfa Hay                                         2.28              2.51              2.09              0.70
  Other Hay and Straw                                 0.71              0.46              0.55              0.54
  All Silage and/or Haylage                           1.33              1.30              1.55              1.27
  Grain Feed                                          1.75               N/A              1.86              0.91
Protein Supplement                                     N/A               N/A               N/A              2.86
Other Feed Inputs                                     3.37              5.58              3.17              1.92
                                         -----------------------------------------------------------------------
    Total Feed Cost/Cwt                               9.44              9.85              9.22              8.20
----------------------------------------------------------------------------------------------------------------
Measure                                    Iowa St. Univ.    Iowa St. Univ.    CDFA 2,000 Cows   CDFA 2,000 Cows
                                          120 Cow Farm \4\   120 Jersey Cows         \5\               \5\
                                                                   \4\
----------------------------------------------------------------------------------------------------------------
Year                                                  2016              2016              2016              2017
----------------------------------------------------------------------------------------------------------------
  Alfalfa Hay                                          N/A               N/A              1.26              1.14
  Other Hay and Straw                                 2.29              2.84              0.18              0.16
  All Silage and/or Haylage                           1.93              2.46              1.89              1.61
  Grain Feed                                          1.33              1.36              1.24              1.28
Protein Supplement                                    0.44              0.38              3.45              3.43
Other Feed Inputs                                     1.56              1.77              1.00              1.03
                                         -----------------------------------------------------------------------
    Total Feed Cost/Cwt                               7.55              8.80              9.01              8.65
----------------------------------------------------------------------------------------------------------------
Measure                                   Cornell NY State  Cornell NY State  Cornell NY State  Cornell NY State
                                          775 avg. herd\6\    811 avg. herd     853 avg. herd     901 avg. herd
                                                                   \6\               \6\               \6\
----------------------------------------------------------------------------------------------------------------
Year                                                  2014              2015              2016              2017
----------------------------------------------------------------------------------------------------------------
Dairy Grain and Concentrate                           7.04              6.42              5.57              5.54
Dairy Roughage                                        0.40              0.35              0.38              0.38
Other Feed Inputs                                     1.63              1.54              1.33              1.28
                                         -----------------------------------------------------------------------
  Total Feed Cost/Cwt                                 9.07              8.31              7.28              7.20
----------------------------------------------------------------------------------------------------------------
\1\ Economic costs are used in the University of Idaho costs and returns estimates. All resources are valued
  based on market price or opportunity cost. The 365-day 3.5% fat-corrected milk for the year is 23,376 lb. per
  cow, which is the state average for 2012. Published September 6, 2013.
\2\ 365-day 3.5% fat-corrected milk for the year is 24,127 lb. per cow, which is the state average for 2014.
  Published May 2015.
\3\ The 365-day 4.7% fat-corrected milk for the year is 19,404 lb. per cow, which is the state average for 2012.
  Published July 6, 2015.
\4\ Dairy feed cost estimates from University of Minnesota and Iowa State University are largely variable costs.
  University of Minnesota data were published in 2019; Iowa State data were published in 2016.
\5\ The dairy feed cost estimates from the California Department of Food and Agriculture (CDFA) are available
  for the north and south valleys, which together account for about 90 percent of California dairy production.
  Dairy budget cost estimates from CDFA are largely variable costs. These data were published in 2017 and 2018,
  respectively.
\6\ The Cornell University dairy feed cost estimates are based on the data from the same 128 farms that have
  participated in the Dairy Farm Business Summary and Analysis Project in New York State. These numbers do not
  represent the average for all dairy farms across New York and are from farms that are generally considered
  above average dairy farms in New York. All Cornell data were published in January 2018.

Figure 1: Feed Cost Shares and Dairy Margin in Dollars per 
        Hundredweight of Milk as Calculated Monthly by USDA for DMC 
        (and formerly, MPP-Dairy)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
          Source: U.S. Department of Agriculture, Farm Service Agency 
        and ARMS.
          Notes:

       The DMC margin is the difference between the all-milk 
            price and calculated 
              feed cost.

       MPP-Dairy was replaced by DMC in January 2019.

       MPP-Dairy used paired-month milk margin as calculated by 
            taking the 
              simple average of the milk margins that were calculated 
            for the individual 
              months in the pairing. The paired months were specified 
            in the 2014 Farm 
              Bill and were January-February, March-April, May-June, 
            etc. The DMC 
              program uses individual month's milk margin, rather than 
            paired-months.

       The alfalfa hay price for all months in calendar 2019 is 
            adjusted for the 
              50/50 split between alfalfa and premium/supreme alfalfa 
            in calculating the 
              alfalfa hay cost.

       Based on published ERS Milk Production Costs and Returns 
            Estimates, the 
              total feed cost for calendar years 2016, 2017 and 2018 
            were $9.35, $9.25, 
              and $9.92 per hundredweight, respectively, as indicated 
            by the horizontal 
              blue lines.
Sec. 1401(b): What are the costs incurred by dairy operations for use 
        of corn silage for feed and what is the difference between the 
        feed costs of corn silage and corn?
    Over the last several years, corn silage has become much more 
important in dairy feeds as production has increased (Figure 2). In 
contrast, production of alfalfa hay has been trending down in most 
significant alfalfa producing States, including California, the largest 
milk producing State. Between 2000 and 2019, national production of 
corn silage has risen by nearly 31 million tons, or by 30 percent. Over 
the same period, national production of alfalfa hay has declined nearly 
27 million tons, or by 33 percent.
Figure 2: U.S. Production of Corn Silage vs. Alfalfa Hay

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Source: U.S. Department of Agriculture, National Agricultural 
        Statistics Service, QuickStats.

    A 2016 USDA/APHIS survey found that 89 percent of operations fed at 
least some corn silage in 2014. Corn silage is an important source of 
forage and supplies more energy than hay, plus it also provides a 
portion of the nutritional equivalence of corn in the dairy ration. 
Most corn silage is used for dairy feed, although it can also go to 
beef cattle such as calves or cows that require large amounts of 
energy. USDA provides production estimates for corn silage and alfalfa 
hay, but it does not estimate disappearance or consumption.
    Much attention regarding the substitution of corn silage for 
alfalfa in dairy production has focused on California because of its 
status as the largest milk producer and traditionally the largest 
alfalfa-producing State. Its alfalfa production has trended down in 
part due to declining availability of irrigation water and its output 
has slipped below other States, including Montana and Idaho. In 
contrast, California corn silage production has been increasing--as is 
the situation for the United States as a whole. California ranks second 
only to Wisconsin currently in silage production and first surpassed 
New York, Pennsylvania, and Minnesota in silage output during the 
1990s.
    Corn silage is a critical dairy feed and is valued as a source of 
forage and energy. It is neither a perfect substitute for alfalfa nor 
for corn, but a very common part of balanced rations that reflect a 
recommended nutritional balance delivered at the least cost. In many 
cases where alfalfa use in rations has fallen, corn silage has 
increased, but increased use of silage is usually accompanied by 
increased use of other hay or roughage sources as well.
No Formal Market or Prices Exist for Corn Silage
    The vast majority of corn silage is fed on the farm where it is 
grown or on nearby operations. It is a bulky product that is not 
amenable to long-distance transport. Thus, the corn silage market is 
regional and thinly traded and any prices that are available are not 
representative nationally. Alfalfa, in contrast, can be baled, 
pelletized, or otherwise processed and a considerable volume is shipped 
between States or exported overseas. As a result of these well-
developed markets, prices for alfalfa are widely available and 
reported. For corn silage, there are no similar market prices, leading 
to the dilemma of how to value it or evaluate its costs. USDA's 
National Agricultural Statistics Service does not collect farm price 
data for corn silage nor does USDA's Agricultural Marketing Service 
report cash prices for silage as they each do for alfalfa hay. Most 
corn grower-dairyman silage contracts are based upon prices determined 
at some point during the growing season using Chicago Mercantile 
Exchange corn futures contracts (Lauer, 2019).
Additional Corn Silage Background
    Production costs for silage tend to be higher than for corn due to 
higher fertility needs since virtually the entire above-ground plant is 
cut and chopped in the production of corn silage, leaving fields 
essentially bare, with no stover remaining. Some additional costs may 
be incurred in the ensiling process and in storage; generally, 
management needs are greater in the production of corn silage than in 
producing corn for grain. Some producers may use inoculants to 
facilitate fermentation. Production of silage can have both indirect 
costs and benefits. One of the indirect costs is its lack of 
transportability due to its bulk and high moisture content; as a 
result, silage must be fed where produced or within a very short 
distance. One of the indirect benefits of silage is less weather risk 
as the crop has more flexible harvest dates and does not have to dry 
down in the field like corn for grain. Silage also has much lower field 
loss compared to hay.
    Adjustments to the ration when feeding more corn silage and 
reducing alfalfa hay mainly involve the increased use of protein 
supplements (usually soybean meal) because alfalfa hay has more 
protein. Non-protein nitrogen (NPN) additives such as urea may also be 
used to increase the crude protein content of corn silage. Some rations 
may substitute barley or by-product feedstuffs for corn to raise the 
protein content. In addition, some additional limestone may be added as 
a buffer to adjust the pH level.
    Variability in corn silage quality may also be an issue. The 
digestibility of neutral detergent fiber (NDF) and starch in corn 
silage is highly variable depending upon crop (individual hybrid) 
genetics, as well as environmental and management factors. Variation in 
concentration and digestibility of NDF and starch in corn silage 
provides management challenges in order to maximize energy intake and 
milk production (Allen). Some processing practices, such as dry rolling 
or steam rolling, grinding, and flaking can enhance the value of the 
silage. Generally, producers achieve nutrient equivalence at least cost 
through the guidance of a nutritionist or the use of computer software 
aimed at targeting least-cost feed formulations.
    Because little silage is traded, no data are available to evaluate 
quality premiums or discounts. Much of the value of silage is inferred 
from local or regional markets for competing feed sources. As indicated 
elsewhere in this report, corn silage has steadily grown as a dairy 
feed over the last two decades while alfalfa has declined somewhat. One 
explanation is that producers have successfully used silage because it 
is cost effective. Dairy producers in the Northeast have long favored 
silage in part due to difficulties associated with producing high 
quality alfalfa in that area, especially compared with western regions. 
However, with dwindling water supplies for irrigated alfalfa, western 
dairy producers have also been increasing use of silage.
The Difference Between Feed Costs of Corn and Corn Silage
    The standard approach in valuing corn silage is to base it off some 
factor relative to corn. As a result, any formal incorporation of 
silage value in the DMC calculations would not add much price 
information as its value would simply move with corn. A common rule of 
thumb is that one ton of silage in the field is worth 8 times the price 
of corn grain per bushel; for corn already ensiled, it is worth 10 
times the price of corn grain. These are far from strict factors, 
however, with values reflecting local conditions related to quality and 
availability of both corn grain and silage, complicating any efforts to 
develop a nationally representative average.\10\
---------------------------------------------------------------------------
    \10\ Cornell University has estimated the value of silage with a 
model that uses the price of alfalfa in addition to corn grain, all 
based on local markets in New York. Results for 3 years valued corn 
silage at 10 to 15 times the price of the corn, on the high end of the 
silage-to-corn ratio used by most extension sources.
---------------------------------------------------------------------------
    The quality dimension is an important component of pricing silage 
when transactions occur, such as in western dairy areas with large 
herds where much of the corn silage is purchased. While formal price 
information based on quality characteristics for alfalfa exists, that 
is not the case for corn silage.\11\ Silage prices vary by quality 
factors such as moisture content, total digestible nutrients, or 
neutral detergent fiber , but these factors are not standardized; 
instead they are negotiated between buyer and seller.
---------------------------------------------------------------------------
    \11\ USDA's Agricultural Marketing Service offers an explicit 
quality value scale for alfalfa hay, including Supreme, Premium, Good, 
Fair, and Utility. These categories are specifically defined based on 
identifiable characteristics of growth stage, stem and leaf quality, 
color, damage, and presence of contaminants like mold and weeds. See 
https://www.ams.usda.gov/sites/default/files/media/
HayQualityGuidelines.pdf.
---------------------------------------------------------------------------
Examining the ``Homegrown'' Component of Silage Costs
    Because market prices for corn have fallen to low levels in recent 
years, milk producers who purchase grain have seen a reduction in costs 
(Figure 3). The average price of corn between 2014 and 2018 was $3.53 
per bushel compared with $5.26 per bushel between 2009 and 2013. This 
has lowered their dairy production costs substantially.
Figure 3: Feed Prices of Main Dairy Cost Factors

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Sources: U.S. Department of Agriculture, National 
        Agricultural Statistics Service, QuickStats (for corn and 
        alfalfa hay). U.S. Department of Agriculture, Agricultural 
        Marketing Service, Central Illinois Soybean Processor Report 
        (for soybean meal).

    The cost of production for corn silage tends to be higher than the 
cost of production for grain. The magnitude of the difference varies, 
reflecting different estimates by location, assumptions about input 
use, and rotational practices such as whether corn is grown after corn 
or after soybeans. For example, crop budgets prepared for several 
states in recent years indicated that corn silage variable costs ranged 
from about 17 percent to as much as 40 percent higher than variable 
costs for corn grain.
    The USDA ARMS survey provides some evidence that costs of purchased 
feeds have recently been steady while costs for homegrown feeds have 
increased. The ARMS questionnaire asks explicitly for expenditures on 
corn silage and corn grain by ``homegrown'' and ``purchased'' 
categories. According to the 2016 ARMS, the total expenditure on corn 
silage (purchased and homegrown) was $1.38 (0.99 + 0.39) per 
hundredweight of milk (Table 3). Over 70 percent of that was 
expenditure on homegrown corn silage, confirming that most of the corn 
silage fed to dairy herds is grown onsite or locally. The expenditure 
on corn, based on ARMS 2016 data, was $0.68 (0.37 + 0.31) per 
hundredweight of milk, roughly equally split between purchased and 
homegrown corn.

 Table 3: Feed Cost of Corn Silage and Corn as Estimated by USDA's ARMS
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Measure                    Dollars per Hundredweight of Milk Produced
------------------------------------------------------------------------
                              2016 \1\         2017 \2\             2018
------------------------------------------------------------------------
Homegrown Corn Silage             0.99              N/A              N/A
Homegrown Corn                    0.37              N/A              N/A
Homegrown Corn and                1.36             1.40             1.61
 Corn Silage
Purchased Corn Silage             0.39              N/A              N/A
Purchased Corn                    0.31              N/A              N/A
Purchased Corn and                0.70             0.67             0.70
 Corn Silage
------------------------------------------------------------------------
\1\ The data for calendar year 2016 is based on the ARMS dairy component
  survey.
\2\ For 2017 and 2018, ERS's Milk Production Costs and Returns Estimates
  are used to extrapolate 2016 ARMS data.

    Note that the feed costs presented in Table 3 are the estimated 
average costs incurred for corn and corn silage across all U.S. dairy 
producers based upon the 2016 ARMS dairy survey. Most producers either 
purchased or harvested corn, but few did both. This is also true for 
corn silage. Further, some producers did not report feeding corn or 
corn silage. Since the estimated average costs presented in Table 3 
represent all U.S. dairy farms, farms with zero-cost for these feed 
components are included in the averages.
    As in the prior section, the 2016 ARMS data were extrapolated to 
2017 and 2018 consistent with ERS's Milk Production Costs and Returns 
Estimates. The costs associated with homegrown feed were extrapolated 
using ERS' Milk Production Costs and Returns Estimates index for 
homegrown feed, while the costs for purchased feed were extrapolated 
using ERS's Milk Production Costs and Returns Estimates index for 
purchased feed. To estimate the change in costs from 2016 to 2017 and 
2018 in their Milk Production Costs and Returns Estimates, ERS uses the 
forage feed price index for homegrown feed and the feed grain price 
index for purchased feed, which are published by NASS.
    On average across ARMS respondents in 2016, the cost of homegrown 
corn silage was $0.99 per hundredweight of milk while $0.39 per 
hundredweight of milk was spent to purchase corn silage. Table 3 shows 
that costs for homegrown feed increased significantly from 2016 to 
2018, while expenditures on purchased feed were essentially flat.
    The cost increases associated with homegrown feed affected dairy 
producers differently depending on the shares of the commodities 
purchased. Dairies that predominantly purchased feed between 2016 and 
2018 did not see expenditures increase. In contrast, dairies that 
relied predominantly on homegrown feed saw their costs increase 
significantly. According to ERS's Milk Production Costs and Returns 
Estimates, the expenditure on homegrown feed increased by about 18 
percent from 2016 to 2018, while the expenditure on purchased feed 
remained unchanged.
    In the current economic environment, when market prices of corn are 
low, the relative costs for homegrown corn and silage are higher 
compared with operations that purchase feed. Conversely, 6 or 7 years 
ago, when market prices were much higher, the operations using 
homegrown corn and silage had a relative cost advantage.
References

 
 
 
    Allen, Mike. Maximizing Digestible Intake of Corn Silage-Based
 Diets: Part 1 and Part 2.
    Michigan State University Extension. September 15, 2011.
    California Department of Food and Agriculture. Dairy Cost of
 Production. https://www.cdfa.ca.gov/dairy/dairycop_annual.html.
    Iowa State University Extension and Outreach. Dairy Budgets. https://
 www.extension.iastate.edu/dairyteam/content/iowa-dairy-budgets.
    Ishler, Virginia A. Getting a Handle on the Farm Bill and the Dairy
 Margin Protection Program. Pennsylvania State University Extension.
 September 3, 2014. https://extension.psu.edu/getting-a-handle-on-the-
 farm-bill-and-the-dairy-margin-protection-program.
    Jones, Coleen M., Jud Heinrichs, Virginia A. Ishler, and Gregory W.
 Roth. From Harvest to Feed: Understanding Silage Management.
 Pennsylvania State University Extension, September 4, 2017.
    Jones, Dave, 2019. Keep Rations Simple, Optimize Efficiency. https://
 www.agriking.com/keep-rations-simple/.
    Karszes, Jason. 2018. Six Year Trend Analysis New York State Dairy
 Farms Selected Financial and Production Factors. Cornell University.
 https://ecommons.cornell.edu/handle/1813/66947.
    Lauer, Joe. 2019. Adjusting Corn Silage Contracts for the 2019
 Season. http://corn.agronomy.wisc.edu/AA/pdfs/A133.pdf.
    Linn, James, Michael Hutjens, Donald Otterby, W. Terry Howard, and
 Lee Kilmer. 2018. Formulating Dairy Cow Rations. https://
 extension.umn.edu/dairy-nutrition/formulating-dairy-cow-rations#protein-
 and-non-protein-nitrogen-1680462.
    National Milk Producers Federation. Foundation for the Future: A New
 Direction for U.S. Dairy Policy. June 2010. https://www.nmpf.org/wp-
 content/uploads//file/Foundation-for-the-Future-061010.pdf.
    Newton, J. and M. Hutjens. ``One Safety Net, Two USDA Measures of
 Dairy Feed Costs.'' Farmdoc daily (5):99, Department of Agricultural
 and Consumer Economics, University of Illinois at Urbana-Champaign, May
 29, 2015. https://farmdocdaily.illinois.edu/2015/05/one-safety-net-two-
 usda-measures-dairy-feed-cost.html.
    Pennsylvania State University. DAIREXNET 2019. Managing Nutrition
 for Optimal Milk Components. https://dairy-cattle.extension.org/
 managing-nutrition-for-optimal-milk-components/.
    University of Idaho. Dairy Budgets. https://www.uidaho.edu/cals/
 idaho-agbiz/livestock-budgets.
    U.S. Department of Agriculture, Agricultural Marketing Service,
 Central Illinois Soybean Processor Report. Various issues.
    U.S. Department of Agriculture, Agricultural Marketing Service.
 Livestock, Poultry, and Grain Market News. Hay Quality Designation
 Guidelines. https://www.ams.usda.gov/sites/default/files/media/
 HayQualityGuidelines.pdf.
    U.S. Department of Agriculture, Animal and Plant Health Inspection
 Service. National Animal Health Monitoring System. Dairy 2014: Dairy
 Cattle Management Practices in the United States, 2014. February 2016.
 Report 1. https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/
 monitoring-andsurveillance/nahms/nahms_dairy_studies.
    U.S. Department of Agriculture, Economic Research Service. Milk
 Production Costs and Returns Estimates. https://www.ers.usda.gov/data-
 products/milk-cost-of-production-estimates.aspx.
    U.S. Department of Agriculture, Farm Service Agency. Dairy Margin
 Coverage Fact Sheet. https://www.fsa.usda.gov/news-room/fact-sheets/
 index (scroll to the dairy section for the DMC Fact Sheet).
    U.S. Department of Agriculture, National Agricultural Statistics
 Service. Agricultural Prices. https://usda.library.cornell.edu/concern/
 publications/c821gj76b.
    U.S. Department of Agriculture, National Agricultural Statistics
 Service. QuickStats. https://quickstats.nass.usda.gov/.
    University of Minnesota. Livestock Enterprise Analysis, 2018. https:/
 /finbin.umn.edu/Output/354230.pdf. Accessed December 2019
 

Appendix--Statutory Language from the Agriculture Improvement Act of 
        2018
  Subtitle D--Dairy Margin Coverage and Other Dairy Related Provisions
Sec. 1401. Dairy Margin Coverage.
    (a) Review of Data Used in Calculation of Average Feed Cost.--Not 
later than 60 days after the date of the enactment of this Act, the 
Secretary shall submit to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate a report evaluating the extent to which the 
average cost of feed used by a dairy operation to produce a 
hundredweight of milk calculated by the Secretary as required by 
section 1402(a) of the Agricultural Act of 2014 (7 U.S.C. 9052(a)) is 
representative of actual dairy feed costs.
    (b) Corn Silage Report.--Not later than 1 year after the date of 
the enactment of this Act, the Secretary shall submit to the Committee 
on Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate a report detailing 
the costs incurred by dairy operations in the use of corn silage as 
feed, and the difference between the feed cost of corn silage and the 
feed cost of corn.

 Appendix Table: Component-Based Tabulation ARMS Estimates of Dairy Feed
      Costs, Measured in Dollars per Hundredweight of Milk Produced
------------------------------------------------------------------------
                                                        Dairy Feed Costs
                                                           (National)
------------------------------------------------------------------------
Measure                                                   Dollars per
                                                        Hundredweight of
                                                         Milk Produced
------------------------------------------------------------------------
Year                                                            2016 \1\
------------------------------------------------------------------------
Commercial/Custom Feed Mix                                          2.08
Alfalfa Hay                                                         1.26
Other Hay and Straw                                                 0.32
Corn Silage                                                         1.37
Other Silage and/or Haylage                                         0.42
Corn                                                                0.68
Other Grain                                                         0.61
Distillers or Brewers Grain                                         0.22
Protein Supplements \2\                                             0.54
Other Feed Inputs                                                   1.70
                                                      ------------------
  Special Tabulation Total Feed Cost/Cwt of Milk from               9.20
   the ARMS
                                                      ------------------
Average Number of Cows Milked                                        237
Number of Observations                                             1,079
Pounds of Milk Produced per Cow                                   21,463
------------------------------------------------------------------------
\1\ The data are based on the ARMS dairy component survey. The feed
  costs in ARMS are largely indicative of variable costs.
\2\ The ARMS dairy survey does not explicitly list soybean meal as a
  feed type but captures this feed component in the ``protein
  supplements'' category. USDA/APHIS, Linn, et al. (2018), and Dairy-
  Cattle.extension.org site (2019) indicate that soybean meal is a major
  source of protein nationally for dairy cows.

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