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USDA announces second round of ‘trade aid’ payments

By: Sean Ellis
Published in Blog on  December 20, 2018

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – Idaho and national farm groups had a tempered reaction to USDA’s Dec. 17 announcement it is launching a second round of trade mitigation payments to farmers and ranchers impacted by other nations’ retaliatory trade tariffs.

Including the first round of payments, which began in September, USDA will provide a total of $9.6 billion in trade aid assistance to dairy, wheat, soybean, corn, cotton, hog, sorghum, almond and fresh sweet cherry producers.

Those are the producers USDA believes have been most impacted by the retaliatory tariffs some nations have placed on U.S. agricultural products.

Most groups representing those agricultural commodities had a similar reaction: While the assistance is welcome, it doesn’t make up for the damage caused by the tariffs.

Wheat growers who qualify for the payments will get 14 cents per bushel in trade aid for their 2018 production.

“We appreciate the acknowledgement that agriculture and wheat farmers have been hurt by the tariffs, but 14 cents per bushel is not nearly enough to make wheat farmers whole,” said Idaho Grain Producers Association Executive Director Stacey Katseanes Satterlee.

The payments are meant to assist producers suffering from what USDA in a news released termed as unjustified trade retaliation by other nations.

An American Farm Bureau Federation analysis of the USDA trade aid plan estimates that Idaho dairy, wheat and corn producers will receive a total of $30 million in assistance.

Idaho’s dairy producers are forecast to receive a total of $17.2 million, the state’s wheat growers are expected to receive $12.6 million total and the state’s corn farmers are forecast to receive about $320,000 total.

Dairy producers who qualify for the trade aid payments will receive 12 cents per hundred pounds of production, wheat farmers will get 14 cents a bushel and corn growers will receive 1 cent per bushel.

Dairy and wheat are Idaho’s No. 1 and No. 4 ranked commodities in terms of total farm-gate receipts.

The USDA in July announced an $11 billion plan to help American farmers and ranchers hurt by unjustified retaliatory tariffs by some of the United States’ main trading partners.

Under the first part of the plan, USDA began distributing almost $4.8 billion worth of payments to eligible producers after Labor Day. The first round of payments was issued to producers based on 50 percent of their 2018 production.

The second round of payments announced Dec. 17 will be for the other 50 percent of producers’ 2018 production and will also total almost $4.8 billion.

AFBF’s Idaho analysis didn’t include sweet cherries but industry leaders said Gem State cherry farmers should be eligible for the payments as well. Cherry producers are set to get 16 cents per pound of production under the USDA trade aid plan.

USDA no longer tracks cherry production in Idaho but the most recent USDA estimates put total Idaho cherry farm cash receipts at $3.6 million in 2015.

Some cherry producers who don’t export their product may not be aware they are eligible for the payments, said Mark Powers, president of the Northwest Horticultural Council. He said his organization is trying to get word out to cherry producers in the Northwest about the payments.

The payments are designed to help even those eligible producers who might not have exported their commodity but are affected because of the domestic impact caused by those nations which imposed retaliatory tariffs not importing as much of that commodity as they normally do.

“Regardless of whether you shipped cherries overseas or not, you should be eligible for that assistance and it should be beneficial,” Powers said. “We don’t want cherry growers to miss it.”

The $17.2 million in trade assistance that Idaho dairy operators are forecast to receive doesn’t come close to helping erase the damage caused by the tariffs, said Rick Naerebout, executive director of the Idaho Dairymen’s Association.

“Idaho dairy operators are disappointed that the administration hasn’t recognized the difficulties the trade wars have created at the farm level,” he said.

Naerebout said the tariffs have negatively impacted U.S. dairy operators to the tune of about $1 for each hundred pounds of milk their cows produce. USDA’s trade aid plan will provide dairy operators 12 cents per hundred pounds of production.

“Giving us 10 percent of that (loss) is a tough pill to swallow given the stress at the farm level” the tariffs have caused, he said.

In a statement, AFBF President Zippy Duvall said the latest trade mitigation package “will help our farmers and ranchers weather the continuing trade storm. We continue to feel price pressure and very real economic damage due to the trade actions other nations have taken against our U.S. farm exports.”

“While this assistance package will help a number of our farm families during this year of severe economic challenge, the best way to provide lasting relief is to continue pushing for trade and tariff reform from trading partners like China, Canada, Mexico, India, Turkey and the European Union,” Duvall said.

National Milk Producers Federation President and CEO Jim Mulhern, in a statement, said, “The tariff-mitigation payment for dairy farmers in this second round of payments is less than we had hoped for, but it will provide some assistance during difficult times.”

The USDA trade aid plan will also provide up to $1.2 billion to purchase unexpected surplus of commodities affected by the retaliatory tariffs. Another $200 million will be used to assist the private sector in developing new export markets for U.S. farm products.

In a press release announcing the second round of payments, U.S. Secretary of Agriculture Sonny Perdue said that while there have been some positive movements on the trade front, “American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations. This assistance will help with short-term cash flow issues as we move into the new year.”

According to the USDA news release, producers only need to sign up once to be eligible for the first and second round of payments. The sign-up period started in September and runs through Jan. 15. Information and instructions are provided at www.farmers.gov/mfp.

Producers who complete an application by Jan. 15 have until May 1 to certify their 2018 production.

To be eligible, producers must have an average adjusted gross income of less than $900,000 for tax years 2014, 2015 and 2016.

USDA estimates U.S. soybean producers will receive a total of $7.3 billion in trade aid payments, pork producers will receive a total of $580 million, cotton producers $554 million and sorghum producers $314 million.

Dairy will get $255 million, wheat $238 million, corn $192 million, sweet cherries $112 million and almonds $63 million.

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