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Next round of trade aid expected in weeks

Kativ-istock Getty Images Money blowing in a cornfield
Perdue hopeful Chinese negotiation conclusion can eliminate need for final tranche of MFP payments.

The second round of 2019 trade aid payments will be ready in the next few weeks, U.S. Secretary of Agriculture Sonny Perdue said during a call with the media on Thursday afternoon. Perdue said the U.S. Department of Agriculture is preparing to have the second tranche of 2019 Market Facilitation Program (MFP) payments ready by the end of November or early December.

As of Nov. 4, USDA reported that 564,181 applications, accounting for $6.687 billion, have been paid out to farmers. The top five states receiving money include Illinois, Iowa, Kansas, Nebraska and Minnesota. The top commodities include row crops such as corn and soybeans, hogs, dairy, cherries and almonds.

The first payment was comprised of the higher of either 50% of a producer’s calculated payment or $15 per acre. When the MFP trade aid package was announced, producers were promised up to $14.5 billion in payments.

Assistance for non-specialty crops is based on a single-county payment rate multiplied by a farm’s total plantings of MFP-eligible crops in aggregate in 2019. Those per-acre payments are not dependent on which crop is planted in 2019. A producer’s total payment-eligible plantings cannot exceed total 2018 plantings. County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county. (Click here to find the payment rate for your county.) Flat rates are set at 20 cents/cwt. for dairy milk and $11 per head for hogs.

USDA issued the first tranche of the 2019 payments in August and had planned to evaluate whether the trade conditions warranted the second and third tranches in November 2019 and January 2020.

Perdue said the final tranche of payments may not be warranted and is very hopeful that negotiations with China to resolve the trade dispute can come to a favorable conclusion. “The numbers we’re talking about right now are very helpful and would supplant any need for aid in 2020,” Perdue said.

The 2019 payments are on top of aid also paid out in 2018. Last year’s MFP paid out a total of $8.6 billion on 1.03 million applications. The top five commodities were soybeans, corn, wheat, cotton and sorghum.

Producers have until Dec. 6, 2019, to sign up for this year’s package.

Disaster payments

In somewhat related news, Perdue touched on the disaster payments offered earlier this year as part of a continuing resolution package to those who experienced losses from natural disasters such as hurricanes, wildfires, tornadoes and flooding. The amount of aid was capped at $3.2 billion.

Recent requests have sought aid to also apply to acreage in the Upper Midwest, which experienced a wet harvest and degrading grain or crop quality. Perdue said initial help can come in insurance claims, but the challenge in using disaster funds would be whether any money is left to match up with demand for the disaster aid.

TAGS: Legislative
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