The U.S. Department of Agriculture (USDA) released details of its $12 billion aid package to help offset the impact of tariffs, which includes a Market Facilitation Program that will make payments to producers of seven farm commodities for the 2018 crop. The program also includes an increase of USDA purchases of various impacted U.S. agricultural products, and a Trade Promotion Program to develop foreign markets for American agricultural exports.
The Ohio Soybean Association (OSA) welcomes the support from the Trump Administration and details of the how that support will be distributed, while also reiterating the need for a long-term solution that opens export markets.
“We’re pleased to see the details of the aid package released in a timely manner so there can be some certainty for farmers moving into the harvest season,” said Allen Armstrong, OSA president and Clark Co. soybean farmer. “However, this is a short-term fix and we continue to advocate for free and open markets with our national affiliate, the American Soybean Association, and for a resolution to the trade dispute with our biggest international customer.”
The value of the 2018 soybean crop has been under increasing pressure ever since tariffs were imposed in early July, with prices dropping approximately $2 per bushel nationally. In the last two months, USDA has raised its estimate for soybean production in 2018 to a record 4.6 billion bushels, reduced its estimate for soybean exports in the 2018-19 marketing year by 230 million bushels, and projected an 82% increase in soybean carryover stocks to 785 million from 430 million bushels by September 2019. In 2017, Ohio was the sixth largest producer of soybeans in the U.S. with 4.8 million acres planted and 263 million bushels. The value of the Ohio soybean crop is currently $2.5 billion and over 60% of Ohio soybeans go to international markets.
The National Pork Producers Council also commended the Trump administration for providing nearly $559 million purchase of pork for federal nutrition assistance and child nutrition programs, $200 million for developing foreign markets for U.S. agricultural products and some direct payments to farmers, including pork producers. They would receive $8 per hog based on 50% of the number of animals they owned on Aug. 1.
“True to his word that he would have our backs, President Trump today demonstrated his commitment to America’s farmers, including pork producers, by giving us some relief from the financial hit we’ve taken from retaliatory tariffs from some of our biggest trading partners,” said Jim Heimerl, a hog farmer from Johnstown, Ohio and NPPC president.
U.S. pork exports to China are down significantly for the year, with the value falling by 9% through June. The drop has come mostly because of the 50% additional tariff that country imposed in response to U.S. duties on Chinese steel and aluminum imports and on other goods over China’s theft of intellectual property and its forced transfers of U.S. technology. Exports to Mexico are down slightly. In June, a 10% tariff on U.S. pork was put into place in response to U.S. tariffs on Mexican steel and aluminum imports; the duty increased to 20% on July 5.
“While we’re grateful and commend the administration for its action to help us, what pork producers really want is to export more pork, and that means ending these trade disputes soon,” Heimerl said.
In addition to continuing to press for a swift resolution to the trade wars, NPPC is asking the White House and congressional lawmakers to approve public-policy initiatives that would buoy pork producers, including ones that would:
- Establish and fully fund a Foot-and-Mouth Disease vaccine bank.
- Prohibit states from regulating agricultural production practices outside their borders.
- Reform the visa system to address an agricultural labor shortage.
- Give USDA oversight of lab-produced cultured protein and gene editing in livestock.
NPPC also is urging the administration to quickly conclude talks on a new trade agreement with Mexico, reiterating its priorities of maintaining the zero-tariff rate on pork traded with that country and of lifting the tariffs on steel and aluminum from Mexico so it will drop its retaliatory tariffs on U.S. pork and other products. (The United States and Mexico today announced agreement on a framework for a new trade deal.)
“Pork producers and others in agriculture have been patriots and very patient as the administration rightfully realigns trade policy to make sure our trading partners play by the rules, to ensure that there’s free, fair and reciprocal trade,” Heimerl said.
USDA’s Farm Service Agency will administer the Market Facilitation Program for payments. Farmers can apply for support beginning on Sept. 4. Applications will be available online at www.farmers.gov/mfp.