USDA is expected to announce details of a second round of assistance for soybean, wheat, sorghum, cotton, dairy and pork farmers hurt by upheaval in foreign markets, according to Michigan Farm Bureau Commodities Department Manager Ernie Birchmeier.
In the meantime, Birchmeier recommends farmers compile their final 2018 yield data, with the expectation that producers will be required to verify their yields to be eligible for payment. The USDA’s Market Facilitation Program (MFP) payments are meant to offset significant economic losses farmers are experiencing as China and the U.S. go tariff-for-tariff in a trade war.
“With aggregate agricultural exports to China falling more than 65 percent year-over-year in August 2018, the list of U.S. commodities under pressure is long,” Birchmeier said. “Total dairy and pork product exports to China have fallen by nearly 50 percent in recent months, while soybean exports were down 97 percent in the first two months of the new marketing year.”
The first round of Market Facilitation Program payments was announced in late August and will help support farm income this year and help family farmers service the record levels of agricultural debt they hold. In many cases, the MFP payments are being used as collateral for operating loans, American Farm Bureau Federation President Zippy Duvall noted in a letter to Agriculture Secretary Sonny Perdue.
In the run-up to USDA’s announcement that it will consider moving forward with the second — and final — round of MFP payments, Farm Bureau urged the department not to eliminate or reduce the trade aid.
“Instead, we propose you both evaluate the ongoing trade damages and reconsider the great need for more Market Facilitation Program payments to be delivered expeditiously to farmers and ranchers. With debt at record levels, operating loans increasing substantially, and debt-to-asset ratios climbing even more, financial support is needed across agriculture,” Duvall noted in the letter.
The Market Facilitation Program payments are part of the White House's trade mitigation efforts. The administration has also pledged to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation.
USDA’s Food and Nutrition Service will distribute these commodities through nutrition assistance programs. In addition, $200 million will be made available through the Foreign Agricultural Service’s Agricultural Trade Promotion Program to develop foreign markets for U.S. agricultural products.