Secretary of Agriculture Sonny Perdue on Feb. 3 announced the third and final tranche of 2019 Market Facilitation Program (MFP) payments designed to assist farmers economically damaged by trade retaliation by foreign nations, principally China. USDA said the payments would begin being received by farmers by the end of this week.
The Trump administration already has distributed around $11 billion to farmers and ranchers to partially compensate for 2019 revenue losses; another $8.6 billion was awarded in 2018.
The first tranche was comprised of the higher of either 50 percent of a producer’s calculated payment or $15 per acre. The second tranche was 25 percent of the total payment expected, in addition to the 50 percent from the first tranche.
“It’s been a great start to 2020 for American agriculture with the signing of the historic Phase One deal with China and the signing of USMCA,” said Secretary Perdue. “While these agreements are welcome news, we must not forget that 2019 was a tough year for farmers as they were the tip of the spear when it came to unfair trade retaliation.”
Farm income: USDA’s Economic Research Service (ERS) projected this week that government payments to farmers will drop by nearly 37 percent from $23.7 billion in 2019 to $15 billion this year.
Meanwhile, net farm income is projected to increase to $96.7 billion in 2020, a 1.4 percent increase from 2019 adjusted to inflation. But net cash farm income is forecast to decrease to $109.6 billion, a 10.7 percent inflation-adjusted decrease from 2019.
Total production expenses are estimated to increase 3 percent to $354.7 billion (in nominal terms) in 2020. Spending on most categories of expenses, especially feed and hired labor, is expected to increase but interest expenses are expected to decline, ERS noted. View more about USDA’s latest farm income report here.