Bloomberg writer Mike Dorning reported on Wednesday that, “U.S. Agriculture Secretary Sonny Perdue sees a ‘less than 10%’ chance that U.S. farmers will get another round of trade aid this year, despite a tweet from President Donald Trump last month raising the possibility.

Weak prices for many farm goods despite Trump’s initial trade deal with China have stoked calls for a new round of assistance for farmers, including from the top-ranking Republican on the House Agriculture Committee, Mike Conaway of Texas.

‘Unless something gives here very soon,’ Conaway told Perdue during an appearance before the committee on Wednesday, another round of trade aid will be ‘absolutely vital to the survival of our producers.’

The Bloomberg article explained that, “But Perdue told the panel Wednesday that he expected China to fulfill a promise in the initial deal to purchase $36.5 billion in U.S. farm goods this year and warned farmers not to expect more aid. He returned to the theme in comments to reporters afterward, when he set the odds of more payments at less than 1 in 10.

“USDA Grains and Oilseed Outlook,” by Sharon Raszap, Agricultural Economist, USDA, Washington, D.C., presented at the Agricultural Outlook Forum (February 21, 2020).

“‘The president’s tweet had a big ‘if’ in the beginning,’ Perdue told reporters.”

Secretary of Agriculture Sonny Perdue.  “The State of the Rural Economy with Agriculture Secretary Sonny Perdue.” House Agriculture Committee Hearing (March 4, 2020).

“Committee Ranking Member Rep. Mike Conaway, R-Texas, said the administration’s action likely saved the livelihoods of many farmers across the country.

“‘I know that you and the president have taken some heat for providing market facilitation payments to farmers, but I would hate to see what the situation in farm and ranch country would be right now if you had not taken those steps,’ Conaway said.”

The DTN article noted that, “Perdue said although 2019 was tough for agriculture, farmers and ranchers are ‘optimistic‘ for better times in 2020.

‘I’m telling farmers to plan for the market,’ he said. ‘We always read things as we want to see them. I’m telling farmers not to expect one (MFP payment). I’m telling farmers if we get the trade and don’t see prices increase, that’s a market signal to farmers who are producing too much.’

Don’t look for us to support MFP as a price-disruption program. It is for trade disruption. They’ve made it perfectly clear they’d rather have trade and not aid.’”

More specifically, in his prepared testimony, Sec. Perdue explained that, “The top commodities affected by the unjustified retaliatory tariffs were row cropshogsdairycherries, and almonds and those commodities –especially row crops – are generally produced on larger farms simply by the nature of the commodities themselves. The top states that received the assistance include Iowa ($1.6 billion), Illinois ($1.4 billion), Texas ($1.1 billion), Minnesota ($1.1 billion), and Kansas ($1 billion) among the top five for 2019 MFP payments. Between July 25th , 2019, when MFP was first announced and through the third and final tranche announced on February 3rd, 2020, FSA processed 1.8 million MFP transactions providing more than $14 billion to 658,356 farmers.”

House Agriculture Committee Chairman Collin Peterson (D., Minn.). “The State of the Rural Economy with Agriculture Secretary Sonny Perdue.” House Agriculture Committee Hearing (March 4, 2020).

And in his opening remarks at Wednesday’s hearing, House Ag Committee Chairman Collin Peterson (D., Minn.) stated that, “We’ve seen the farm income numbers come out for 2019. If it weren’t for payments to farmers through the Market Facilitation Program and disaster payments, farm income would have been in the tank last year.

A farm economy propped up by payments from the government isn’t a healthy farm economy.

USDA- Economic Research Service Webinar: Farm Income and Financial Forecasts, February 2020 Update (February 5, 2020).
“2020 Farm Sector Income Forecast,” February 5, 2020 (USDA-ERS).

“I really hope the markets return to normal. But the President’s comments about a third payment also don’t give me a lot of hope that we’ll see tangible benefits from these new trade deals anytime soon. That’s a promise that the Administration made to farmers, and without it, the farm economy isn’t going to recover.”

Source: Keith Good, Farm Policy News