USDA Issues First Coronavirus Food Assistance Program Payments

A news release today from the USDA stated that, “U.S. Secretary of Agriculture Sonny Perdue today announced the USDA Farm Service Agency (FSA) has already approved more than $545 million in payments to producers who have applied for the Coronavirus Food Assistance Program. FSA began taking applications May 26, and the agency has received over 86,000 applications for this important relief program.

“‘The coronavirus has hurt America’s farmers, ranchers, and producers, and these payments directed by President Trump will help this critical industry weather the current pandemic so they can continue to plant and harvest a safe, nutritious, and affordable crop for the American people,’ said Secretary Perdue. ‘We have tools and resources available to help producers understand the program and enable them to work with Farm Service Agency staff to complete applications as smoothly and efficiently as possible and get payments into the pockets of our patriotic farmers.’

In the first six days of the application period, FSA has already made payments to more than 35,000 producers. Out of the gate, the top five states for CFAP payments are Illinois, Kansas, Wisconsin, Nebraska, and South Dakota. USDA has released data on application progress and program payments and will release further updates each Monday at 2:00pm ET. The report can be viewed at farmers.gov/cfap.”

Today’s update added that, “FSA will accept applications through August 28, 2020. Through CFAP, USDA is making available $16 billion in financial assistance to producers of agricultural commodities who have suffered a five-percent-or-greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities.”

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Missed Home Loan Payments Jumped in April

Bloomberg writer John Gittelsohn reported recently that, “Delinquencies on U.S. home loans surged by 1.6 million in April, the biggest one-month gain ever, after the government cleared the way for Americans who lost income in the pandemic to delay payments without penalty.

Mortgages at least 30 days in arrears almost doubled to 6.45%, the highest rate since January 2015, according to data compiled by Black Knight Inc. About 3.4 million loans were more than 30 days late and an additional 211,000 properties were in foreclosure or on track for repossession by lenders.

A federal relief program allows borrowers impacted by the virus an initial six-month payment deferral without penalty. About 4.7 million borrowers were in forbearance as of May 12, according to Black Knight.”

The Bloomberg article added that, “‘While April saw a record single-month increase in the national delinquency rate, the data shows that the vast majority of new delinquencies represent borrowers who are currently in COVID-19-related forbearance programs,’ said Andy Walden, economist and director of market research at Black Knight.

“The pace of delinquency increases is unprecedented but it’s still uncertain whether the volume of problem loans will return to the levels they reached after the last decade’s foreclosure crisis. About 7.9 million mortgages were noncurrent in January 2010, according to Black Knight.”

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UK Start-Ups Secure Support Through “Future Fund,” a Government Co-Investment Program

Last month, Financial Times writers Daniel Thomas, Tim Bradshaw and George Parker reported that, “Fast growing start-ups struggling to survive the lockdown will finally secure state support this week with the launch of the £250m co-investment ‘Future Fund.’

“The government is set to take stakes in some of the UK’s most promising companies under the scheme, which will allow bailout loans offered by the Treasury to be converted into equity.”

The FT article noted that, “High-growth tech firms have complained that they have been unable to access any of the government bailout schemes open to businesses hit by the crisis. Start-ups are typically lossmaking in their early years as they seek to scale up, which prevents them from taking a state-backed loan.

The Future Fund will offer up to £5m in government loans as long as the amount is matched by the group’s private sector investors. These loans can then be repaid, or converted into equity at a discount at the next funding round or after three years.

“Unlike equity investment, there is no requirement under these convertible loans to value the company, which helps speed the process at a time when company valuations have been significantly hit by Covid-19. Once companies and their investors complete an application through the BBB portal, they should receive funds in as little as 14 days.”

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Bayer Reaches Deals on Share of 125,000 Roundup Suits

Bloomberg writers Jef Feeley and Tim Loh reported this week that, “Bayer AG has reached verbal agreements to resolve a substantial portion of an estimated 125,000 U.S. cancer lawsuits over use of its Roundup weedkiller, according to people familiar with the negotiations.

The deals, which have yet to be signed and cover an estimated 50,000 to 85,000 suits, are part of a $10 billion Bayer plan to end a costly legal battle the company inherited when it acquired Monsanto in 2018, the people said. While some lawyers are still holding out, payouts for settled cases will range from a few million dollars to a few thousand each, said the people, who asked not to be identified because they aren’t authorized to speak publicly.

“Bayer is likely to announce the settlements, which need approval from the supervisory board, in June, people familiar with the negotiations said. None of the deals are signed, though plaintiffs’ lawyers are expected to do so the day of the announcement, the people said.”

The Bloomberg article noted that, “Bayer declined to comment on specifics about the talks. Chris Loder, a U.S.-based spokesman, said Friday the company has made ‘progress in the mediations’ that arose from lawsuits. ‘The company will not speculate about settlement outcomes or timing,’ Loder said in an emailed statement. ‘As we have said previously, the company will consider a resolution if it is financially reasonable and provides a process to resolve potential future litigation.'”

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FSA Expands Set-Aside Loan Provision for Customers Impacted by COVID-19

An update yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] will broaden the use of the Disaster Set-Aside (DSA) loan provision, normally used in the wake of natural disasters, to allow farmers with USDA farm loans who are affected by COVID-19, and are determined eligible, to have their next payment set aside. In some cases, FSA may also set aside a second payment for farmers who have already had one payment set aside because of a prior designated disaster.

“‘This immediate change of the Set-Aside provision can provide some welcome financial relief to borrowers during this current crisis,’ said FSA Administrator Richard Fordyce. ‘FSA recognizes that some customers may need this option to improve their cash flow circumstances in response to the COVID-19 outbreak.’

FSA direct loan borrowers will receive a letter with the details of the expanded Disaster Set-Aside authorities, which includes the possible set-aside of annual operating loans, as well as explanations of the additional loan servicing options that are available. To discuss or request a loan payment Set-Aside, borrowers should call or email the farm loan staff at their local FSA county office.”

Yesterday’s update added that, “USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.”

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USDA Announces Details of Direct Assistance to Farmers through the Coronavirus Food Assistance Program

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “U.S. Secretary of Agriculture Sonny Perdue today announced details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic. In addition to this direct support to farmers and ranchers, USDA’s Farmers to Families Food Box program is partnering with regional and local distributors, whose workforces have been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.

“‘America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus. President Trump has authorized USDA to ensure our patriotic farmers, ranchers, and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers,’ said Secretary Perdue. ‘These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers. America’s farmers are resilient and will get through this challenge just like they always do with faith, hard work, and determination.’

Beginning May 26, [USDA], through the [FSA], will be accepting applications from agricultural producers who have suffered losses.”

Yesterday’s update noted that, “To ensure the availability of funding throughout the application period, producers will receive 80 percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.

USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.”

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Meat Plant Sued Over Worker’s COVID-19 Death

Earlier this month, Bloomberg writer Millie Munshi reported that, “The family of a beef plant worker who died because of the coronavirus has brought a wrongful death lawsuit in a Philadelphia court against JBS SA, the world’s biggest meat company.

“Ferdinand Benjamin filed the suit on Thursday after his father, Enock Benjamin, died of respiratory failure caused by Covid-19, according to a copy of the timestamped complaint provided by Saltz Mongeluzzi & Bendesky, the law firm representing the family. Enock Benjamin worked at the JBS USA plant in Souderton, Pennsylvania.”

The Bloomberg article stated that, “The suit may be part of the beginning of a litigation wave against meat companies after thousands of U.S. workers contracted the virus. At least 27 meatpacking workers have died in the coronavirus pandemic, according to the United Food and Commercial Workers International Union.”

The article also noted that, “Smithfield Foods Inc. was sued last month by employees at a rural Missouri pork-processing facility. They argued that the company, owned by Hong Kong-based WH Group Ltd., hadn’t done enough to protect workers from the virus. U.S. District Judge David Gregory Kays on [May 5th] declined to hear the case, saying it’s up to the Occupational Safety and Health Administration and the U.S. Department of Agriculture, not the courts, to oversee safeguards for workers.”

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California Gig Workers- Contractors or Employees, Issues Persist

New York Times writer Kate Conger reported recently that, “California’s attorney general and a coalition of city attorneys in the state sued Uber and Lyft on [May 5th], claiming the companies wrongfully classified their drivers as independent contractors in violation of a state law that makes them employees.

“The law, known as Assembly Bill 5, requires companies to treat their workers as employees instead of contractors if they control how workers perform tasks or if the work is a routine part of a company’s business.

At least one million gig workers in the state are affected by the law, which is supposed to give them a path to benefits like a minimum wage and unemployment insurance that have been traditionally withheld from independent contractors.”

The article noted that, “Although A.B. 5 took effect on Jan. 1, Uber, Lyft and other gig economy companies that operate in California have resisted and are not taking steps to reclassify their drivers. Uber, Lyft and DoorDash have poured $90 million into a campaign for a ballot initiative that would exempt them from complying with the law. Uber has also argued that its core business is technology, not rides, and therefore drivers are not a key part of its business.

The lawsuit also claims the ride-hailing companies are engaging in an unfair business practice that harms other California companies that follow the law. By avoiding payroll taxes and not paying minimum wage, Uber and Lyft are able to provide rides at ‘an artificially low cost,’ the suit claims, giving them a competitive advantage over other businesses. The suit seeks civil penalties and back wages for workers that could add up to hundreds of millions of dollars.”

Ms. Conger added that, “California’s move is a significant threat to the gig companies and could influence other states with similar laws to take action against them, labor experts said.”

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More Online Grocery Shopping Inspires Investors to Look Closely at the Sector

Melissa Repko reported recently at CNBC Online that, “FreshDirect co-founder and former CEO Jason Ackerman said customers’ growing interest in online grocery shopping during the coronavirus pandemic has whet venture capital firms’ appetites.

“In an interview with CNBC’s ‘Squawk Alley,’ he said the surge of online grocery shopping has inspired more investors to look closely at the sector.

“‘I’m seeing more deals in online grocery … than I’ve ever seen before,’ he said.”

The CNBC update added that, “In the U.S., customers have been slow to adopt online grocery shopping. Only 3% or 4% of grocery spending in the U.S. was online before the coronavirus outbreak.

“During the pandemic, however, online grocery shopping has quickly gained popularity as people look for ways to avoid the grocery store. Grocers and delivery services, such as Instacart and FreshDirect, have struggled to ramp up to meet that sudden increase in demand.”

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TODAY—USDA to Host Webinar for Producers Interested in Applying for Direct Payments through the Coronavirus Food Assistance Program

A news release this week from USDA’s Agricultural Marketing Service (AMS) stated that, “The [USDA’s AMS] and Farm Service Agency (FSA) will host a webinar on Thursday, May 14, 2020, at 1 p.m. ET, for farmers, ranchers and other producers interested in applying for direct payments through the Coronavirus Food Assistance Program (CFAP).

This webinar is an opportunity for producers to learn about the general application process and required documentation prior to the official beginning of signup. Producers interested in participating may register in advance for webinar at https://www.zoomgov.com/webinar/register/WN_SPWI7yOFSqaGG1JKzhEbjA.

“After registering, you will receive a confirmation email containing information about joining the webinar. We encourage participants to submit questions through the Q&A box or by emailing CFAP.webinars@usda.gov. While questions will not be answered live during the webinar, answers will be posted at farmers.gov/CFAP.”

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