By former USDA Secretary John R. Block.
There isn’t a lot of happy talk in the U.S. or around the world. These are depressing times. The Coronavirus sickness and resulting deaths are all you see on tv, hear on the radio or read in the papers. Concern about the virus and the health of our citizens has dominated, but now a lot of leaders are trying to figure out how and when they can put their economies back in business. The economic distress is costing millions of jobs and income for so many workers.
Former Federal Reserve Chair Janet Yellen said, “this is a huge unprecedented hit.” She expects the unemployment rate to hit 13 percent and then move higher. Our Congress and President Trump have come together to provide billions and billions of dollars to fund programs to help small businesses and workers that have lost their jobs. Farmers will qualify for the loans. Secretary Sonny Perdue has been criticized on how the Department of Ag is giving out government money – who gets the money? He said, USDA would “distribute stimulus payouts in a fair and equitable manner.” I am confident the Administration will do the best they can. We have 42 million low income food stamp recipients. Most of them cannot get home delivery. Many are elderly and don’t want to take the virus risk by going to the store. Now our government is trying to figure out how to get the food delivered. Who will pay for the delivery charge?
Nothing is easy. If we focus on the ag industry the unanswered questions are endless. Oil prices have tanked. Ethanol prices hit bottom. Ethanol plants are closing because they can’t afford to operate, so they don’t buy any corn. Half of our corn is processed to make ethanol. Why did fuel prices collapse? 1. We aren’t driving cars. 2. Oil reserve storage facilities in countries around the world are almost full. 3. Saudi Arabia and Russia have turned on the oil hydrants to drive down prices and put their competition out of business.
Positive news – there is word that the oil countries will meet later this week. Maybe they will cut a deal. We hope.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, just go online to www.johnblockreports.com.