Banking & Finance, Economic Development, and Food Service & Agriculture

USDA issues second tranche of farmer payments

But farmers claim disbursements are a temporary fix that doesn’t solve bigger issues.

November 22, 2019
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MFP Payments
The Market Facilitation Program payments are given to producers of nonspecialty and specialty crops, dairy and hogs. Courtesy Tim Boring

Some farmers are now receiving financial assistance just in time for Thanksgiving.

The U.S. Department of Agriculture is in the process of releasing its second tranche of 2019 Market Facilitation Program payments to farmers who have been affected by tariff disputes between the U.S. and other countries.

“The tariff disputes have led to price/revenue declines and have caused a decline in global market share for Michigan and U.S. agricultural products,” said Theresa Sisung, associate field crops and advisory team specialist for the Michigan Farm Bureau.

The MFP payments are given to producers of nonspecialty and specialty crops, dairy and hogs.

According to Sisung, some of the nonspecialty crops that are eligible are alfalfa hay, barley, canola, corn, crambe, dry beans, dry peas, extra long-staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton and wheat.

She also said specialty crops include almonds, cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, hazelnuts, macadamia nuts, pecans, pistachios and walnuts.

To receive payments, however, Sisung said producers must sign up by Dec. 6.

According to the U.S. Secretary of Agriculture, the MFP for 2019 is providing $14.5 billion in direct payments to producers. The first payment was issued in August, which is “comprised of the higher of either 50% of a producer’s calculated payment or $15 per acre.”

“In this second round of payments, farmers will receive 25% of their total expected payment,” Sisung said. “Total payments are calculated differently for different crops. For nonspecialty crops, a single payment rate was assigned to each county, and farmers will receive that rate multiplied by the total acres they planted to eligible nonspecialty crops by Aug. 1, 2019. Dairy farmers will receive $0.20 per hundredweight of milk produced, based on production history.

“Hog farmers will receive $11 per head. Specialty crop farmers will receive a payment based on their 2019 acres of those eligible crops. The specialty crop payment rates differ between each crop.”

Tim Boring is a farmer and the vice president of Michigan Agri-Business Association. He has a 500-plus-acre family farm in Stockbridge, where he grows corn, soybeans, wheat and other small grains. He said the payments that are calculated are up for debate.

“The rates are supposed to be determined by individual county by county impacts of the trade war, but there are payment rates to farmers in the South that have been quite a bit higher than those in ... the Midwest, which calls into question to some extent how those rates are specifically calculated,” he said.

Boring said he averages about 160 bushels of corn per acre and roughly 200 to 250 acres per year. He said he yields about 50 bushels of soybeans per acre on the same 200 to 250 acreage.

A lot of his corn and soybeans are delivered to plants in Michigan. He said some of his corn is delivered to the Andersons Ethanol Plant in Michigan; he also delivers his corn and soybeans to local grain elevators. Soybeans, Boring said, are ultimately destined for export to a variety of places, including China. His wheat is primarily processed in Michigan.

“Farmers do not want government programs to fix the economic issues that are going on,” he said. “Farmers want free trade; they want to be able to have freely determined markets by which to base decisions and how we grow things. These continued rounds of government payments aren’t necessarily terribly warmly received in principle in the farming community. They certainly help the economic bottom line, but they don’t fix the structural issues that we have going on that is increasing so much uncertainty within our market. The idea that we need to get back to a situation where we are operating on free trade, I think is really important and it is concerning to me that the fact that the president keeps talking about these tariffs are being paid by China, when in fact the money coming for these payments are originating from tariffs that are borne by the American consumer. We need to get back to a point where we are operating on free trade and we have some predictability in the market.”

Boring said the ongoing tariff war has damaged the U.S. trading market around the world, not just with China but also with all the other countries that the U.S. has continued trade disagreements with.

“A lot of these international markets were developed over decades of work on the United States agricultural sector, and they have really been predicated on the fact that the United States is a reliable and stable trading partner,” he said. “These trade efforts obviously diminish our reliability and predictability as a trade partner going forward.”

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