BLOOMINGTON, Ill. — When the U.S. Department of Agriculture recently rolled out another Market Facilitation Program, officials kept their cards close to their vest and details since then continue to be kept under wrap.
“They don’t want you making planting decisions based on those details. So, USDA Secretary Perdue has been very coy and more information will be released after the final acreage reporting deadline July 15,” said Adam Nielsen, Illinois Farm Bureau director of national legislation and policy development.
What is known about MFP:
- $14.5 billion in direct payments to farmers.
- Payments will be county-based and can vary by county.
- Payment rates have not been announced as of now.
- Payments will be made in three installments: late July/early August, as soon as practical following Farm Service Agency July 15 acreage reporting deadline; if warranted, a second payment will be made November 2019; if warranted, a third payment will be made in early January 2020.
“There will be a payment in July or August and then they’re holding out the hope there will be some kind of a trade deal with the Chinese, and some of the market that we’ve lost over the last year-plus will come back. So, payment two and three may not be,” Nielsen said at the McLean County Farm Bureau-hosted prevented planting meeting June 3.
“They’re still holding out the hope that something will happen, primarily with China. Secretary Perdue had indicated that the Chinese in some of the earlier discussions had agreed to purchase many more times what they were already purchasing from us. So, there’s optimism there.”
The county payment rates will be announced at a later date based on trade damage over two years and historic plantings. Each county will have one published payment rate based upon the trade damage that county has incurred. The county blended payment rate will be the same regardless of which eligible crop planted in 2019.
“Some were putting pencil to paper and it was apparent that some counties are going to fare better than other counties, and the thought was the more soybeans you grow in your county the better off you’re going to be. We did some back-of-the-envelope calculations and discovered that was the case,” Nielsen said.
“We looked at Carroll County which is corn-on-corn with some soybeans, Champaign County which is 50-50 corn and soybeans, and Clinton County which is 50-35-15 soy/corn/wheat.
“Just from a comparison purpose, the 50-50 counties would receive the highest per-acre payment. Corn-on-corn will receive about 54% of that highest payment, and soy-corn-wheat about 87% of the highest payment.”
Nielsen warned that these are relative numbers and “don’t take these to the bank.”
Farm Bureau officials and farmer members are having ongoing discussions with U.S. House and Senate elected officials and are asking legislators for:
- Pushing back the crop insurance deadline to Dec. 1.
- Because spring crop insurance guarantees were impacted by trade and, as a result, prevented planting protection is lower, “we’re asking that prevented planted acres be included in MFP,” Nielsen said.
- If not PP acres included, then base MFP payments on historic planted area, not 2019 acres.
- Be transparent on calculations and announce as soon as possible to help farmers in financial planning.
- Make all payments in 2019 and consider making two rather than three payments to help farmers meet immediate financial needs.
- Consider county-to-county payment discrepancies to prevent large differences across county lines which would result in competitive advantages for farmers when bidding on land in 2020.
- Make sure county FSA staff are up to speed on the rules.
“We have not gotten any feedback at all from USDA on some of these suggestions, but we understand that they have received them, they have acknowledged receiving them to the American Farm Bureau, and we hope they consider them,” Nielsen said.
The root cause of the MFP — trade, tariffs — remains up in the air.
The latest is President Donald Trump’s proposal that Mexico meet his immigration demands or face a 5% tariff which would increase over time if an agreement isn’t reached.
Mexico is a major purchaser of Illinois agricultural products and there also was talk at one point in closing the Mexico-U.S. border.
Nielsen said in 2018, Illinois farmers exported to Mexico $485.4 million in corn, $110 million in pork, $38 million in beef and beef products, $32.4 million in soybean meal and $22.1 million in dried distiller’s grains with solubles.
Illinois corn exports represented 45% of all U.S. corn exports to Mexico. Mexico purchases 20% of U.S. pork exports.
“Mexico is a significant market for us and we didn’t need the border closed, fortunately it wasn’t, and these tariffs aren’t going to help. Let’s hope that cooler heads prevail and we don’t go further down that road,” Nielsen said.
“We’re making that known to members of Congress on both sides of the aisle. We know that members of Congress occasionally get called by the president out of the blue and have an opportunity to talk about what’s happening in their district. We want this trade situation to be one of the things they talk to the president about.”