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USDA Farm Payment Details, $150/Acre Max Payment

Farmers get your mailbox ready, checks are coming.

WASHINGTON, D.C. -- Trump administration will send more than $7 billion in trade-war payments to farmers this summer, with signup opening on Monday. Payments will range from a minimum of $15 an acre to a maximum of $150 an acre for row crops, said USDA officials on Thursday.

“Farmers have borne a disproportionate share of trade retaliation,” said Agriculture Secretary Sonny Perdue, so the second year of Trump tariff payments is justified. Producers “continue to be affected by trade damages,” he said.

Farm groups welcomed the assistance with varying degrees of warmth. “These are difficult times for agriculture and the longer these trade wars continue, the deeper the impact on farm country,” said Zippy Duvall of the American Farm Bureau Federation. The National Pork Producers Council called the aid “partial relief” and president Ben Scholz of the National Association of Wheat Growers said it was a Band-Aid when we really need a long-term solution.”

“NAWG understands holding China accountable for its WTO violations and unfair trade practices but a trade war is not the solution when farmers are the casualties,” said Scholz.

President Trump announced in May, when talks with China broke down, that up to $16 billion would be spent to mitigate the the impact of the Sino-US trade war on agriculture. Farmers and ranchers would get the bulk of it, up to $14.5 billion in cash. Some $1.4 billion would be spent to buy and then give away foods, such as pork and poultry, affected by the trade war and $100 million was awarded to trade groups to find new overseas customers.

Agriculture is the only sector of the economy to receive trade payments. The money is being drawn from the Commodity Credit Corp, known as USDA’s bank and able to spend $30 billion a year to bolster the crop prices and farm income.

Along with payments to farmers, the USDA will spend $1.4 billion to buy and then give away foods affected by the trade war and $100 million to build overseas markets.

Signup for cash payments opens on Monday and runs through Dec 6.

To divide the $14.5 billion among producers, USDA officials said they calculated trade damage per county and then per acre of eligible crops. The cash will be disbursed in three tranches. The first, expected in mid to late August, would equal half of a farmer’s estimated total assistance or a minimum of $15 an acre.

Farmers can look up their county payment rate.

Maximum payment rate for field crops is $150 an acre. More than two dozen crops, from corn and soybeans to crambe and chickpeas, are eligible.

A portion of the aid money will go to specialty crop growers, also on the basis of acreage, and part will go to dairy and hog farmers. Ginseng producers would get $5,700 an acre, fresh sweet cherries $1,555 and nuts $146. Dairy farmers would receive 20 cents per 100 pounds of milk based on past production and hog farmers, $11 per hog based on inventories from April 1-May 15.
 
The payment limit for each of the three categories of production - row crops, specialty crops, and hogs and dairy - will be $250,000 with an overall payment limit of $500,000 per producer per entity. USDA usually allows payments to be doubled for a married couple. Eligibility generally would be limited to people with less than $900,000 in adjusted gross income. People with a higher AGI are eligible if at least three-fourths of their income is from agriculture.

Growers with prevented-planting acreage qualify for a patent of $15 an acre on the land. Perdue said the wettest spring in a quarter century would result in a record-large total for prevented planting. USDA officials declined to elaborate.

The second tranche of payments would be made in November and the final tranche in January. Those payments will depend on trade conditions at the time.

Poultry would account for the largest part of the food purchase program. The USDA said it would buy $432 million of poultry, $208 million of pork and $200 million of canned food, soups and cereals.

When it calculated trade damage, the USDA looked at the past decade of sales to China and other countries with tit-for-tat tariffs on US farm exports and chose the best year of sales. Perdue shrugged off the suggestion that USDA exaggerated losses. “It does describe what our trade partners could be importing from us tomorrow,” he said.

USDA chief economist Robert Johansson said payments were based on overall acreage rather than by crop so producers would not feel compelled to plant a particular crop, such as soybeans, to qualify for aid.

“The county rate will be the same for any crop,” said Johansson. “Of course, there will be county (by county) differences.”

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