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USDA Says Aid Program Won’t Skew Planting Decisions


USDA on Tuesday said its new round of trade aid “is being designed to avoid skewing planting decisions” after soybean prices fell following a Bloomberg report with details on the aid package.

Bloomberg reported USDA would announce a $15 billion aid package on Thursday that would pay farmers $2 a bushel for soybeans, 63 cents a bushel for wheat and 4 cents a bushel for corn. The report cited “two people familiar with the payment levels.”

According to the Bloomberg report, payments would be based on this year’s planted acreage. “The administration is considering basing payments on the acreage farmers plant this year and their historic yield of crops per acre, the people said.”

While corn continued its weather rally Tuesday, moving up 6 cents in the December contract to $4.10 a bushel, November soybeans fell 9 cents to $8.48 a bushel after the report came out.

USDA’s communications office declined to confirm details reported in the Bloomberg article, but also stated farmers should not plant based on the aid program.

“Details on the new trade mitigation program will be forthcoming shortly, but we want to be clear that the program is being designed to avoid skewing planting decisions one way or another,” a USDA spokesperson stated in an email to DTN. “Farmers should continue to make their planting and production decisions with the current market signals in mind, rather than some expectation of what a farming support program might or might not look like, based on a media story.”

USDA later issued the same statement in a news release, but changed the final comments to “inaccurate media stories.”

Commodity groups reached by DTN either declined to comment on the report or stated they were trying to confirm the same information with USDA.

Under last year’s Market Facilitation Program, farmers received $1.65 a bushel for soybeans, 14 cents a bushel for wheat and 1 cent a bushel for corn.

Groups such as the National Corn Growers Association have maintained since last year that farmers growing their commodities should have received higher payments. NCGA states its analysis show corn farmers had price disruptions from trade of 44 cents a bushel. NCGA’s trade mitigation suggestions go further, asking USDA to help with ethanol policy issues at EPA as well. (https://www.ncga.com/…)

Sen. Jerry Moran, R-Kan., wrote Agriculture Secretary Sonny Perdue on Monday about trade, calling for a resolution with China, but also asking that USDA not affect planting decisions with the new aid package.

“Farmers planting for the market, not government programs, has been a central tenant (tenet) of farm policy for over two decades,” Moran wrote. “It is important this principle continue to be followed and for trade payments not to distort planting decisions.”

Moran explained that could be accomplished if USDA based payments on recent farm history of planted acres and yields on the higher of actual 2018 yields or average yield history on the farm.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

Source: Chris Clayton, DTN

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