There was an important two-letter word in President Donald Trump’s tweet last week suggesting there could be a third round of trade assistance payments.
“It said ‘if,'” Agriculture Secretary Sonny Perdue told farmers at Commodity Classic here on Friday. “Let me clarify: My advice and counsel to him is the MFP payments were a trade-damage mechanism, and we used the CCC to make up for lost income based on the inability to trade. It was never designed as a price support program.”
He said the agency isn’t crafting a third round of Market Facilitation Program payments and advises farmers to plant for market.
“We believe we will see prices rise as these commodities start to flow again,” he said.
Perdue said he explained farmers’ perspective on trade to President Trump by making comparisons to the president’s real estate career. He asked Trump to suppose he was building a resort, and once he got through the entire planning process, the community said it didn’t want it and offered to pay his expenses.
“I said, ‘You would take that money, but it wouldn’t be as fulfilling as earning it through what you can create.’ That’s the way farmers are. They’re fulfilled when they’re able to grow things and get that money across the scales rather than the mailbox.”
Although sales under the phase-one trade deal with China have been slow to materialize, National Sorghum Producers Chairman Dan Atkisson said the administration has passed a number of trade pacts over the past three years, and it’s starting to have a positive impact.
“I’m excited and optimistic to say that as of yesterday, we had almost 500 million metric tons that was sold to an unknown destination, so draw your own conclusions, but I think we are starting to see the impact of those trade agreements,” he said.
Perdue added that his Chinese counterparts have been hard at work making the technical changes to regulations that are essential to achieving the phase-one deal’s target. He said he understands many farmers’ “I’ll believe it when I see it” attitude, but he said he’s giving China the benefit of the doubt.
“I am optimistic that the phase-one numbers that have been negotiated — hard, unilaterally enforceable numbers — will be met, unless there are extenuating circumstances that are reasonable, and that’s within our ability to determine.”
He said USDA is developing a matrix to help them monitor China’s compliance with the deal’s parameters. While the coronavirus outbreak has disrupted the flow of goods at Chinese ports, there are signs that it’s beginning to reverse directions, and Perdue said he’s hopeful the disruption will be minimal.
The best thing U.S. farmers can do is focus on growing safe, reliable food, feed, fuel and fiber like they always have, he said.
“Agriculture has made enormous strides in productivity in recent years, and USDA is working to find more markets in an attempt to make sure we don’t become overly dependent on any one customer,” Perdue said.
“If we get trade, and we get those exports, and we don’t see the markets move like we think they ought to, that ought to be a signal to us that we’re producing too much of one commodity or another, ” he said, reiterating that price is a function of both supply and demand.
“That’s what farmers as businessmen and women have had to deal with all of their life. In many places, they arbitrage between corn and beans and other crops. But that’s what I’m trying to say: If we go back to export levels that we’ve seen in the past and prices don’t rise, we need to look at the level of productivity in order to adjust. The market is a pretty good arbiter of supply and demand.”
Perdue said he expects the next World Agricultural Supply and Demand Estimates report to reflect more of the phase-one deal as well as the coronavirus.
Katie Dehlinger can be reached at Katie.firstname.lastname@example.org
Follow her on Twitter @KatieD_DTN
Source: Katie Dehlinger, DTN
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