Farmers can now Learn how Much Aid They Will Get From the Trump Administration

Manuel

Summary:

The U.S. Department of Agriculture released the figures Wednesday for how much aid per acre farmers can plan on for each row crop.

Farmers are now learning how much aid they can expect to receive from a $12 billion package that President Donald Trump announced earlier this month.

The U.S. Department of Agriculture released the figures Wednesday for how much aid per acre farmers can plan on for each row crop. The details arrived after most farmers have already met with their bankers to arrange financing for next year's crops and placed orders for the seed and fertilizer they will need. But officials have promised that the payments should arrive by the end of February.

Soybean farmers have been hit especially hard by Trump's trade war with China, which stopped buying any American crops after Trump announced his tariffs this spring. China is the world's largest buyer of soybeans. This aid package is expected to help farmers weather the trade disruptions until China buys more soybeans under an agreement announced in October and until provisions of Trump's massive budget bill take effect later this year.

Soybean farmers will get $30.88 per acre while corn farmers will receive $44.36. Another crop hit hard when China stopped buying was sorghum, and those farmers will get $48.11 per acre. The amounts are based on a USDA formula on the cost of production.

But farmers say the aid won't solve all their problems as they continue to deal with the soaring costs of fertilizer, seeds and labor that make it hard to turn a profit right now. Some agricultural trade groups have said they worry that thousands of farmers could go out of business, but others have said they believe most farmers have the financial resources and equity needed to survive.

Kentucky soybean farmer Caleb Ragland, who was president of the American Soybean Association until recently, said the aid is “a Band-Aid on a deep wound. We need competition and opportunities in the market to make our future brighter.”

The President of the National Corn Growers Association Jed Bower also urged the Trump administration to focus on cultivating additional uses for their crops. Farmers will benefit from having more buyers whether it is for ethanol and animal feed at home or for international markets.

“Corn growers have been sounding the alarm about the fact that farmers have been faced with multiple consecutive years of low corn prices and high input costs,” Bower said. “While this financial assistance is helpful and welcomed, we urgently need the administration and Congress to develop markets in the United States and abroad that will provide growers with more long-term economic certainty.”

Most farmers remain steadfast supporters of Trump even after the disruptions caused by the trade war. They generally support many of his other policies and believe they will get a better trade deal in the end.

These aid payments will add up to $11 billion for row crop farmers who raise corn, soybeans, wheat, sorghum and other crops. Another $1 billion will be put aside for specialty crops as the administration works to better understand the circumstances for those farmers.

After Trump met with Chinese leader Xi Jinping in South Korea in October, the White House said Beijing had promised to buy at least 12 million metric tons of U.S. soybeans by the end of the calendar year, plus 25 million metric tons a year in each of the next three years. Officials have said China is on track to meet the 12 million metric ton goal by the end of February.

As of Dec. 18, China had bought about 6 million metric tons of soybeans, according to the latest USDA’s weekly report. Separately, the federal agency reported that China since then bought at least three more batches totaling 600,000 metric tons.

Beijing has yet to confirm any commitment to buying 12 million metric tons of soybeans for this season, but the Chinese embassy in Washington said earlier this month that “agricultural trade cooperation between China and the United States is proceeding in an orderly manner.”

The aid payments will be capped at $155,000 per farmer or entity, and only farms that make less than $900,000 in adjusted gross income will be eligible. During the first Trump administration, a number of large farms found ways around the payment limits and collected millions.

The USDA said it would use a formula that estimates production costs to come up with a per-acre payment for each type of crop. The USDA says the average size of the 1.88 million farms nationwide was 466 acres last year, but many farmers are much larger than that as larger operations have continued to buy up neighboring farms over time.

Source: AP

News, historical chart data, and fundamental company data are provided by FastBull Ltd.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.