MFPs Could be Delayed into February, Third Round in Question

03:34PM Jan 14, 2020
U.S. Capitol
MFP 3.0 could be in question upon a successful trade deal with China.
( MGN )

Some Trump administration officials, including USDA Secretary Sonny Perdue, are holding off on the final installment of market facilitation payments (MFP) until they see what happens with the phase one trade deal with China, according to Pro Farmer’s Jim Wiesemeyer. Farmers and farm groups alike are pushing for the trade aid to go through by the end of the month.

Despite the pending trade agreement, farmers haven’t seen commodity prices rebound, and many are feeling pressure on their bottom line. Farmers and groups say MFP could help farmers through tough cash flow situations until the market rebounds.

“What I’ve heard is that a series of ag industry, lobbyists, economists, etc., have been invited by top USDA economist Robert Johansson to brief USDA Secretary Perdue,” says Jim Wiesemeyer, Pro Farmer policy analyst. “[It would be] a day before the ag outlook forum—February 19. If that’s the case, then we may not have a decision on this third installment for a while.”

Based on the current financial situation in ag, MFP could make a big difference in farm country. However, Wiesmeyer indicates policymakers might be concerned that announcing the payments in close relation to signing the trade deal could suppress market reaction—which could be part of why the checks are not yet in the mail.

“They said that announcement [MFP 2.0’s third tranche] would come sometime in January and then, they modified it by saying early February,” Wiesemeyer says.

When it comes to a third round of MFP 2.0, which many producers and bankers were planning for this year, Wiesemeyer isn’t as confident as he was a few months ago that they’ll happen.

“I’m going to reserve judgement and let the marketplace and China’s purchase intentions tell me about the odds for that,” Wiesemeyer says. “I’m not nearly as confident as I was before.”

However, with it being an election year, others find it hard to believe MFP 2.3 won’t happen.

“I really can’t see it not happening—there would be a lot of really upset people,” says Anna-Lisa Laca, pollical reporter and dairy editor for Farm Journal. “I just really can’t see the Trump administration risking that in an election year.”

Another Round of MFP 011420