FSA payment program registration underway
As he reviews 2018’s growing season, Allen Davis sees a tough year: late spring planting across Delmarva, uncooperative weather throughout the summer, and a trade war that’s driven commodity prices down.
The Trump administration has created a payment program to ease growers’ pain, and Davis, like many farmers in the region, said he appreciates it, though he’d like to see the disputes end.
“It’s certainly not going to bring the lost market back, but considering the trade war we’re in, it’ll help,” said Davis, who grows corn, wheat, soybeans and chickens on more than 3,000 acres in Kent County, Md.
Signups began Sept. 4 for the Farm Service Agency’s $4.7 billion Market Facilitation Program, which will pay producers of corn, cotton, sorghum, soybeans, wheat, dairy and hogs for the 2018 crop or marketing year. Though there may ultimately be two payments, the first applies to the first 50 percent of a farmer’s production.
Payment rates are as follows: $1.65 per bushel for soybeans, $0.86 per bushel for sorghum, $0.14 per bushel for wheat, $0.06 per pound for cotton, $0.01 per bushel for corn, $0.12 per hundredweight for dairy and $8 per head for hogs.
Chinese imports of U.S. soybeans have virtually disappeared after the Trump administration imposed tariffs on $34 billion worth of Chinese imports in July. China has focused its retaliatory penalties on autos and agricultural products, targeting an industry that supported President Trump in 2016.
Both countries have imposed tariffs of 25 percent on more than $50 billion worth of each other’s exports this year, and Trump has threatened an additional $200 billion in tariffs on Chinese goods. Resulting trade damage has impacted a host of U.S. commodities with soybean prices falling by more than 20 percent.
“The temperature I’m getting from most of the farmers is that while, yes, they’re going into the FSA to report their bushels and take the payment, they would much rather be able to sell their grain at a marketable price,” said Lindsay Thompson, executive director of the Maryland Grain Producers Association.
Farmers are signing up in county FSA offices, and payments should be distributed quickly, said Sean McKeon, Delaware’s FSA executive director.
“Without a doubt we would rather have access to the markets than a payment. This is a short-term Band-Aid to see us through,” said Chip Councell, a Talbot County grain farmer and former chairman of the U.S. Grains Council.
He and several other farmers said uncertainty surrounding trade could imperil secondary agricultural markets — companies that make various field inputs or equipment such as tractors.
“We’re looking at some low commodity prices, and typically that’s not the time to go out and make big investments, and whether that’s machinery or land or whatever, you kind of tighten the belt until you get some clear signals,” Councell said.
Jeff Rathell of Rathell Farm Equipment in Easton, Md., said he’s already begun to see the effect. Customers, he said, are leaning toward purchasing more used equipment or repairing what they already own.
“We’re going to see more repair work, and we’ll see repair work right at that last minute,” he said.
To prevent a backlog of customers just before spring, Rathell said he expects his company and others like his will offer discounts to farms from December through March.
“The farmers are more skeptical about what to do. Very cautious,” he said.
Signup for the FSA’s Market Facilitation Program runs through Jan. 15, 2019. If it’s determined to be necessary, a second payment installment will be announced in early December, according to the FSA. That payment would apply to the second half of an eligible farm’s 2018 production.
The program is limited to each person or legal entity at a combined $125,000 for corn, cotton, sorghum, soybeans and wheat; and a combined $125,000 for payments on dairy or hogs.
Allen said he continues to support the president.
“It’s been the Trump administration’s actions that have brought on the markets that we’ve seen to date, but when I look at it, I can see the reasons for taking the steps that they felt they needed to take,” he said. “I’m hopeful that cooler heads will prevail and they can come to some agreements here, some demand will come back into the market.”