Assistance to Farmers Finally Announced
Aug 28, 2018
The USDA yesterday released details on the financial assistance that will be made available to farmer due to the continuing tariff situation with China and other countries. The FSA offices are currently getting training on how to implement this assistance, so it is likely that you will not get much help from the local office this week.
Here is the press release on the announcement.
You can sign up for the Market Facilitation Program (MFP) starting September 4 (the day after Labor Day). You will not receive any payments until your harvest is complete. Therefore, about the only grain farmers to receive any payments in the near future will be wheat farmers. There will be an advance payment of 50% of your final production times a rate for each crop or commodity as follows:
- Cotton - 6 cents per pound (estimated $277 million payout),
- Corn - 1 cent per bushel (yes it is only 1 cent and $96 million),
- Dairy - 12 cents per hundredweight ($127 million),
- Pork - $8 per head ($290 million)
- Soybeans - $1.65 per bushel ($3.6 billion),
- Sorghum - 86 cents per bushel ($157 million), and
- Wheat 14 cents per bushel ($119 million).
The total payment in the first go round is about $4.7 billion. Some of this will be doled out before the election, but a substantial majority will be not paid until November or even later. According to the announcement it sounds like you can not even apply for this until harvest is complete. Dairy producers will be paid based on their highest milk production history for 2011-2013 must be in operation as of June 1, 2018. Hog producers will be paid based upon the number of hogs on hand as of August 1, 2018.
The announcement also indicates that there may be another 50% payment in the future if warranted. However, if we truly do have a new "NAFTA" will any further payments be made for pork and dairy, etc. We shall see.
There is a separate $125,000 payment limit on this program and you are also subject to the $900,000 AGI limitation. Therefore, if you are close to maxing out on your PLC payment (minimal ARC payments this year is my assumption other than counties with very low yields), you will not limited on these payments.
To calculate your initial payment, you will:
- Take the producer's total 2018 production (including crop share landlords),
- Multiply it times your applicable rate, and
- Then multiply by 50%.
Here is an example - Farmer Eric harvested 450,000 bushels of wheat. This times 14 cents is $63,000 times 50% equals $31,500. That is the initial payment. There may be another payment of $31,500 or no payment or perhaps some number in between.
Other crops have been harmed by the tariffs such as fruits and vegetables. The USDA will spend up to $1.2 billion under the Food Purchase and Distribution Program to purchase fruits, vegetables and other commodities harmed by the tariffs. These commodities will then be distributed to various nutrition assistance programs. The announcement provided a list of crops likely to be purchased with corresponding budgeted amounts. The assumption is that the price paid may be closer to the price before the tariffs went into place, thus bringing some relief to those producers.
The bottom line is if you only grow corn and soybeans, I would not be in a great hurry to get to the local FSA office. Right now, it is likely that they do not know much more than what you know. I would probably contact them no earlier that mid-September. For wheat, pork and milk producers, contacting them next week may speed up your payment.