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Trump Tariff Payments and E15 Take a Hit From Shutdown
The partial government shutdown is putting a kink in the Trump tariff payments to farmers, and it could prevent the EPA from approving the sale of E15 by the summer, as promised by President Trump. But farm groups have made few public complaints about the shutdown, now in its third week.
“The shutdown has not bitten our members very hard, so far,” said spokesman Will Rodger of the American Farm Bureau Federation, the largest U.S. farm group, on Monday before listing areas of concern. Producers face a January 15 deadline to enroll in the Market Facilitation Program, as the $9.6 billion in tariff payments are formally named, but USDA local offices are closed, which also means farmers cannot apply for various USDA loans. Update: Market Facilitation Program Deadline Will Be Extended
Because of the shutdown, the USDA also postponed indefinitely the release of major reports on U.S. and world crops originally scheduled to appear on Friday. The reports include USDA’s first estimate of winter wheat sowings, data on crop output and usage at home and around the world, and a quarterly survey of U.S. grain stockpiles.
“We also miss economic reports, such as the WASDE,” said Rodger. “We have been actively polling our state members to keep track of local conditions … We are hoping for the best in the meantime.”
“The delay of economic reports will make it difficult for farmers to make informed decisions about which crops to plant in the upcoming season,” said the National Farmers Union, the second-largest farm group. Also on social media, the NFU said, “Another unexpected consequence of the shutdown is the delayed implementation of year-round E15, which would help farmers struggling with depressed prices and oversupply.”
Trump started the regulatory process for year-round sales of E15, a 15% blend of corn ethanol in gasoline, last October 9 and predicted the change in policy “is all going to go very quickly.” At present, E15 cannot be sold during the summer. Last fall, the EPA said it would propose by February 2019 a regulation to allow summer sales, with a rule in place by the end of May, leaving scant time for any delays. However, the agency is part of the shutdown, so action on E15 is in hiatus for the moment.
“From the outset, EPA gave itself very little wiggle room to complete the year-round E15 rulemaking before summer, so the shutdown is making a tight time line even tighter,” said Geoff Cooper, chief executive of the trade group Renewable Fuels Association. “However, we remain confident that EPA can and will deliver on President Trump’s commitment to resolve the barrier to year-round E15 sales before June 1.”
Agriculture Secretary Sonny Perdue will decide, when the shutdown ends, whether to extend the January 15 deadline for enrollment in tariff relief, said USDA. When the shutdown began, the USDA said Trump tariff payments would be made for producers who already certified their 2018 production with their local office.
Some producers will have to wait for payments, however. Officials as high ranking as Undersecretary Bill Northey advised producers last month to wait until January 1 to certify their production if they wanted, for tax purposes, to assure payment in 2019. Farmers and ranchers often time expenditures or receipts at the end of the calendar year with an eye to tax liability. Although USDA offices are closed for the interim, producers have until May 1 to turn in the production data.
As of mid-December, the USDA paid $2.38 billion to producers of almonds, corn, cotton, dairy, hog, sorghum, soybeans, fresh sweet cherries, and wheat.
Websites for the largest groups representing corn, wheat, soybean, pork, beef, and dairy farmers carried statements thanking Trump for signing the 2018 farm law but were silent on the shutdown.