USDA releases trade damage estimation for MFP and food buy programs
The Agriculture Department released a paper that outlines the methodology it used to estimate the level of gross trade damage caused by retaliatory tariffs to U.S. agricultural exports by commodity.
Those estimates were used to determine the 2019 Market Facilitation Program payment rates and the value of commodities to be targeted for purchase under the 2019 Food Purchase and Distribution Program.
The paper also outlines the formulas employed to calculate MFP county rates for non-specialty crops, as well as national MFP rates for specialty crops, hogs and milk. USDA announced details on those programs on July 25.
“Just as we did before, we want to be transparent about this process and how our economists arrived at the numbers they did,” Agriculture Secretary Sonny Perdue said.
“Our farmers and ranchers work hard to feed the United States and the world, and they need to know USDA was thorough, methodical, and as accurate as possible in making these estimates. We listened to feedback from farmers on last year’s programs and incorporated many of those suggestions into today’s programs.
“While no formula can be perfect in addressing concerns from all commodities, we did everything we could to accommodate everyone,” Perdue said.
“For a long time, China and other nations have not provided free, fair, and reciprocal access to U.S. farmers and ranchers and President (Donald) Trump is the first president to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices.
“Our support package ensures farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.”
National Corn Growers Association President Lynn Chrisp noted the payment rate for corn is $0.14 per bushel and said “NCGA welcomes USDA’s transparency in this process.”
“Corn farmers were understandably disappointed by the 1 cent per bushel for corn in the first MFP program and we appreciate that it appears USDA considered our recommendations in developing MFP 2.0,” Chrisp said.
“Amid farmers’ concern over crop conditions, trade disputes and tariffs, and demand destruction in the ethanol market, this program will not make any farmer whole. NCGA continues to strongly advocate for the administration to open markets and provide more certainty for corn farmers, including addressing the harm caused by RFS waivers and resolving trade disputes and tariffs.”
NCGA analysis showed an average price loss for corn of 20 cents per bushel from May 2018 to April 2019. As trade talks with China lagged on in March and April of 2019, losses widened closer to 40 cents per bushel.