Ag Secretary Sonny Perdue met with President Donald Trump to talk about the second round of trade-aid payments to farmers. Perdue had said an announcement was coming out on December third but that had come and gone. It was first delayed as Washington honored the passing of former President George H.W. Bush. Since then it has been affected by other factors. However, producers got the solid answer they needed on Monday.
On Monday Afternoon, Secretary Perdue launched the second and final round of trade mitigation payments aimed at assisting farmers suffering from damage due to unjustified trade retaliation by foreign nations. Producers of certain commodities will now be eligible to receive Market Facilitation Program (MFP) payments for the second half of their 2018 production.
“The President reaffirmed his support for American farmers and ranchers and made good on his promise, authorizing the second round of payments to be made in short order. While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations. This assistance will help with short-term cash flow issues as we move into the new year,” said Perdue.
American Soybean Association director, Rob Shaffer said the United States Department of Agriculture needed to make good on their promise to help farmers out. Shaffer says 15-20 years of hard work in developing a trade partnership with China was wiped out at the stroke of a pen.
While the building of export markets to other countries is good, Shaffer says it would take at least eight large-scale trade deals to equal what the business lost from China.
Soybeans have felt the sting of tariffs from China and Mexico. Hopes are a finalized USMCA trade agreement will ease pressure from Mexico. China has started to make some small grain purchases, totaling approximately 1.43 Million Metric Tons (MMT). Rumor has it they plan to purchase about 10 MMT during the trade war cease-fire. These amounts are nowhere near large enough to make up the 31+ MMT of soybeans they normally would have purchased during this time of year.
Upon the announcement of the 2nd round of payments, the American Soybean Association released the following statement:
“Soy growers are very thankful that President Trump understands the need for this payment on the full 2018 production and that the Administration will deliver the second half of the aid as promised. While it will not make our losses whole, it will certainly help offset the drop in prices we have experienced since China cut off U.S. soybean imports. We saw some initial sales of U.S. soybeans to China last week, which was also welcomed news and we hope a sign that the trade war could be turning a corner as a result of President Trump’s recent meeting with President Xi.”