You are here

Second Round of Trump Tariff Payments Is Coming, USDA Says

Payment rate could remain the same, Perdue says.

The Trump administration will begin a second, multibillion-dollar round of payments to soybean, cotton, pork, dairy, sorghum, wheat, and corn producers by December, said Agriculture Secretary Sonny Perdue on Monday.

“I can confirm there will be a second tranche,” Perdue told reporters after a swearing-in ceremony for the new director of the National Institute of Food and Agriculture. “Again, we are continuing to look at market conditions. We are discussing this really as we speak. Quite frankly, right now, we see no change in the amount that would change our minds about a different amount.” (The rates for each of the commodities are listed below.)

Perdue said there are no plans for the payments – called the Market Facilitation Program (MFP) – to continue into 2019. “Farmers are very resilient,” he said, and will decide their production plans for the new year “without the expectations of a market facilitation program.”

Soybean growers were in line for the lion’s share – $3.6 billion – of the $4.7 billion that USDA earmarked for crop and livestock producers to offset the impact of retaliatory tariffs by U.S. trading partners, including China, Canada, Mexico, and the EU in response to steep U.S. duties on imported steel and aluminum. Formerly the top market for U.S. farm exports, China also imposed duties on an array of U.S. products, including ag exports, because of U.S. duties on its high-tech industry.

The dairy industry has called on the administration to adjust payment rates for the second round. The USDA set a dairy payment rate equal to a penny a gallon for payments that began in September. Corn and wheat growers have said their payment rates were unfairly low – 1¢ a bushel for corn and 14¢ a bushel for wheat.

When the Trump administration announced the farm bailout just before Labor Day, officials said payment of a second round would depend on the state of trade relations. They said there might not be a second round if there were breakthroughs in negotiations. President Trump has demurred on opening talks with China. The steel and aluminum tariffs remain in force against Canada and Mexico, so they have maintained tariffs on U.S. ag goods despite agreement on a successor to NAFTA.

What will the payments be?

If the MFP rates stay the same for the second payment, as Perdue indicated they would, farmers can calculate their estimated payment rate using the formula: MFP rate × 50% of 2018 actual production.

These are the confirmed rates for the first payment by commodity:

Commodity Initial Payment Rate Est. Initial Payment (in $1,000s)
Cotton $0.06 / lb. $276,900
Corn $0.01 / bu. $96,000
Dairy (milk) $0.12 / cwt. $127,400
Pork (hogs) $8.00 / head $290,300
Soybeans $1.65 / bu. $3,629,700
Sorghum $0.86 / bu. $156,800
Wheat $0.14 / bu. $119,200
Total $4,696,300

For more information on the MFP, read 15 Questions and Answers on the USDA Trade Retaliation Mitigation Payments.

Read more about

Talk in Marketing

Most Recent Poll

How many 2019 inputs did you buy in 2018?