MID­WEST SCORES BIG

FIVE STATES GET BULK OF AID AS TRADE WAR SCRAM­BLES CROP OUT­LOOK.

Successful Farming - - Q A THE SUCCESSFUL INTERVIEW -

The lion’s share of the pro­jected $4.7 bil­lion in Pres­i­dent Trump’s tar­iff pay­ments to crop and live­stock farm­ers will cas­cade into the Mid­west – be­tween 60% and 75%, de­pend­ing on how broadly the re­gion is de­fined. There is sim­mer­ing re­sent­ment over how the money is al­lo­cated. The USDA set a pay­ment rate of $1.65 a bushel for soy­beans but only 1¢ a bushel for corn and 14¢ for wheat.

“It is in­sult­ing that USDA’s plan sells corn farm­ers so short,” said Corn Grow­ers pres­i­dent Kevin Skunes in an op-ed in a Capi­tol Hill news­pa­per. Wheat Grow­ers pres­i­dent Jim­mie Mu­sick de­plored the pay­ments as in­ad­e­quate and, like many farm group lead­ers, called for “trade, not aid.”

Soy­bean grow­ers will see cash pay­ments of $3.6 bil­lion, hogs at $290 mil­lion, sorghum at $157 mil­lion, wheat at $119 mil­lion, and corn at $96 mil­lion un­der the aid plan an­nounced by Agri­cul­ture Sec­re­tary Sonny Per­due just be­fore La­bor Day. The big soy­bean and hog states of Illi­nois, Iowa, Min­nesota, In­di­ana, and Ne­braska will garner nearly half of the money, even though pay­ments are be­ing pro­rated by 50%, says Farm Bu­reau econ­o­mist Veron­ica Nigh.

“We al­ways knew agri­cul­ture was go­ing to be the tip of the spear” when a trade war be­gan, said Agri­cul­ture Sec­re­tary Sonny Per­due in an­nounc­ing the aid pack­age, which he said al­lows time for Pres­i­dent Trump’s pol­icy of trade con­fronta­tion to pay off. USDA will de­cide by early De­cem­ber whether to make a sec­ond round of pay­ments. The state of trade ne­go­ti­a­tions will be a ma­jor fac­tor.

Nearly half of the farm­ers in a Pur­due poll said the ad­min­is­tra­tion’s prom­ise of a cush­ion against re­tal­ia­tory tar­iffs did noth­ing to al­lay their fears of lower in­come this year. An ad­di­tional 43% said the prom­ise “some­what” re­lieved their con­cerns. The poll was con­ducted af­ter USDA said up to $12 bil­lion was avail­able for aid but be­fore USDA an­nounced the pack­age of $4.7 bil­lion in pay­ments to pro­duc­ers, $1.2 bil­lion in pur­chase of sur­plus foods, and $200 mil­lion to de­velop new over­seas mar­kets. In the Pur­due poll, 71% of re­spon­dents said they ex­pect lower in­come this year due to trade tur­moil; most say the re­duc­tion will be less than 20%.

“Anx­i­ety among farm­ers is com­pletely un­der­stand­able,” said a USDA spokesper­son. “There’s no ques­tion they

would rather sell a good crop at a fair price, rather than re­ceive a govern­ment pay­ment.”

The trade war with China ended ex­pec­ta­tion of a neck-and-neck race for acres be­tween soy­beans and corn, says the Univer­sity of Mis­souri think tank FAPRI. It projects soy­bean plant­ings to fall by nearly 6%, or 4.6 mil­lion acres, in 2019, while corn and wheat each gain roughly 2 mil­lion acres. Soy­beans topped corn as the most widely planted crop this year, for the first time since 1983. FAPRI says corn area will top 92 mil­lion acres in most cases over the next five years, while soy­beans never reach 86 mil­lion acres.

“China’s tar­iffs will re­duce U.S. soy­bean ex­ports,” says FAPRI, at the same time soy stocks bal­loon and mar­ket prices are the low­est in 12 years. Soy­bean ex­ports would stag­nate at cur­rent lev­els rather than grow­ing in the near term.

Kevin Skunes

Jim­mie Mu­sick

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