The USDA’s announcement Monday with more details on the $12 billion aid package was met with mixed reactions from the agriculture and livestock sector. Some said thanks and some said trade not aid.
Through the Market Facilitation Program (MFP) in the Trump Tariff Aid Plan, sorghum producers will receive 86 cents per bushel. This initial payment will only be made on 50 percent of 2018 actual production, and a second payment on the remaining 50 percent will be subject to reevaluation if warranted, USDA said in its announcement. The initial payments for sorghum are expected to total approximately $156 million.
“National Sorghum Producers would like to thank USDA Secretary Sonny Perdue and U.S. officials who have worked together to stand by U.S. farmers and provide much needed relief. This sends a strong message to the international trade community and will hopefully facilitate a speedy resolve to our current trade disputes. NSP appreciates the assistance provided, along with the purchase and promotion components that can help build toward more lasting solutions.”
The National Pork Producers Council commended the Trump administration for providing assistance to America’s farmers suffering from the ongoing trade disputes with China, Mexico, and other nations.
The $12 billion aid package includes a $559 million purchase of pork for federal nutrition assistance and child nutrition programs, $200 million for developing foreign markets for U.S. agricultural products, and some direct payments to farmers, including pork producers. They would receive $8 per hog based on 50 percent of the number of animals they owned on Aug. 1.
“True to his word that he would have our backs, President Trump today demonstrated his commitment to America’s farmers, including pork producers, by giving us some relief from the financial hit we’ve taken from retaliatory tariffs from some of our biggest trading partners,” said NPPC President Jim Heimerl, a hog farmer from Johnstown, Ohio.
U.S. pork exports to China are down significantly for the year, with the value falling by 9 percent through June. The drop has come mostly because of the 50 percent additional tariff that country imposed in response to U.S. duties on Chinese steel and aluminum imports and on other goods over China’s theft of intellectual property and its forced transfers of U.S. technology. Exports to Mexico are down slightly. In June, it put a 10 percent tariff on U.S. pork in response to U.S. tariffs on Mexican steel and aluminum imports; the duty increased to 20 percent on July 5.
“While we’re grateful and commend the administration for its action to help us,” Heimerl said, “what pork producers really want is to export more pork, and that means ending these trade disputes soon.”
The National Corn Growers Association said the aid package is so insufficient to even begin to address the serious damage done to the corn market as a result of the Administration’s actions. The organization reiterated its call for the Administration to rescind tariffs, secure trade agreements, and allow for year-round sales of higher blends of ethanol; no-cost actions that would allow for the marketplace to drive demand.
“NCGA members had a spirited debate on the prospect of trade aid during last month’s Corn Congress meeting,” said NCGA President and North Dakota farmer Kevin Skunes. “While most members prefer trade over aid, they support relief if it helps some farmers provide assurances to their local bankers and get through another planting season. Unfortunately, this plan provides virtually no relief to corn farmers.”
According to an NCGA-commissioned analysis, which NCGA provided to USDA and the Office of Management and Budget (OMB), trade disputes are estimated to have lowered corn prices by 44 cents per bushel for crop produced in 2018. This amounts to $6.3 billion in lost value on the 81.8 million acres projected to be harvested in 2018. USDA’s plan sets the payment rate for corn at just one cent per bushel.
“NCGA has understood from the beginning that this aid package would neither make farmers whole nor offset long-term erosion of export markets. But, even with lowered expectations, it is disappointing that this plan does not consider the extent of the damage done to corn farmers,” Skunes said. “Once again, we are calling on the Administration to settle trade disputes and support a strong Renewable Fuel Standard. These no-cost, immediate actions would deliver a real win for rural America.”
The National Association of Wheat Growers echoed the same sentiment. Assistance to wheat growers will be 14¢/bushel.
“NAWG appreciates the Administration’s steps to hold China accountable for unfair trade practices but tariffs and the subsequent self-inflicted need to provide aid aren’t the answer. Farmers across the country want ‘trade, not aid’, especially wheat growers,” NAWG President and Sentinel, OK wheat farmer Jimmie Musick said. “About half of all U.S. wheat is exported, making new trade deals and establishing new global markets, a priority for all wheat farmers. As a result of the tariffs, China hasn’t purchased any wheat from the United States since March. Further, we estimate that the ongoing trade war will cause a 75¢/bushel price decrease and a reduction in global wheat production.
“U.S. Wheat Associates makes a similar note in their statement, which NAWG supports. The federal aid package invests in market development programs which we hope will repair some of the damage resulting from the tariffs. However, this solution is only temporary, and both organizations encourage the Administration to must move forward with new trade deals.
“Farm income is down, and rural America is enduring a prolonged economic downturn. This relief package shows that the Administration isn’t grasping the tough conditions being faced by farmers. The long-term solution is to end the trade war.”