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Trump Tariff Payments Top $6.4 Billion as Deadline Nears

The USDA has received nearly 805,000 applications and paid out $6.41 billion so far in the Trump tariff payments created to buffer the impact of the Sino-U.S. trade war, said the USDA on Monday. The Trump payments are the largest element of a mitigation package that was announced as a maximum of $12 billion but could turn out smaller in the end.

Already, the payments are a bolster for U.S. farm income. They were the primary reason the USDA modestly raised its forecast of 2018 net farm income (a measure of wealth that includes revenue as well as commodities held in storage) last November. Direct federal payments to farmers and ranchers, at $13.6 billion, would be their largest since 2006, before the commodity boom sent wheat, corn, and soybean prices soaring and reduced the need for the farm safety net.

An additional $1.23 billion could be paid on applications still being processed, said the USDA, which would put the payment total at $7.64 billion. Deadline to apply for payments is February 14.

The USDA has said up to $9.6 billion is available to producers of almonds, cotton, corn, dairy, pork, soybeans, sorghum, sweet cherries, and wheat. Soybean growers, hit hard by the loss of sales to China, were in line for up to $7.3 billion. Producers are limited to a maximum of $125,000 each for grain, livestock, and fruits and nuts.

Last month, a senior USDA official said the Trump payments could total around $8 billion. The USDA has not said what it expects the payments to total. The USDA awarded $200 million last week to 57 trade groups to find new markets for U.S. farm exports, one of the elements of its trade-mitigation package. The third element, purchases of $1.2 billion in food for donation to public nutrition programs, began last fall.

If payments to farmers and ranchers reach the $9.6 billion maximum, the mitigation package could total $11 billion. If the cash payments to producers are $8 billion, the package could total $9.4 billion.

So far, Illinois and Iowa, who lead the nation in soybean production, are the top states for payments and soybeans are the leading commodity for payments. The USDA gave soybeans the highest payment rate, $1.65 a bushel. Corn and dairy farmers say their rates are unduly low—a penny a bushel for corn and a penny a gallon for milk. Hog farmers qualify for $8 per head, and the USDA said payments could reach $581 million, ranking second to soybeans. The top commodities for payments, to date, are soybeans, corn, wheat, dairy and sorghum.

Farm groups have thanked the administration for the tariff payments while quietly calling for an end to tit-for-tat tariffs that have hurt U.S. farm exports, which account for more than 20¢ of each $1 in farm revenue. The USDA estimates exports will dip to $141.5 billion this year, down by $1.9 billion from 2018 but still the third highest on record. The peak was $152.3 billion in fiscal 2014, as the commodity boom collapsed.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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