Half of the producers in a Purdue poll say announcement of Trump tariff payments did nothing to allay their concerns about lost income during trade war with China and other major customers for U.S. ag exports. Some 71 percent of crop and livestock producers expect a decline in farm income from trade conflicts but not as deep as initially feared, according to the Ag Economy Barometer released on Tuesday.
Some 47 percent of producers chose “Not at all” as their response to the question, “To what degree does President Trump’s $12 billion relief plan for U.S. farmers relieve your concerns about the impact of tariffs on your farm’s income?” Purdue said 43 percent chose “Somewhat,” 4 percent selected “Completely” and 7 percent were “Uncertain.”
Purdue, which produces the ag barometer, a monthly gauge of farmer sentiment, surveyed 400 producers in mid-August, a couple of weeks after Agriculture Secretary Sonny Perdue said the administration would spend up to $12 billion to offset the impact of retaliatory tariffs but before the USDA said producers could expect up to $4.7 billion in cash this fall.
A USDA spokesman was not immediately available for comment on the poll results.
Sign-up for the payments began on Tuesday and runs through January 15. Seven commodities are eligible for payment – soybeans, sorghum, wheat, cotton, corn, hogs and milk – with a separate payment limit of $125,000 per person for crops and for livestock for a maximum payment of $250,000. Growers with less than $900,000 adjusted gross income are eligible.
The portion of farmers who expect lower income held steady in Purdue polling, running at 71 percent in the new report and 71 percent in the previous report. Of that group, three-quarters say they expect a decline of up to 20 percent, compared to the preceding report, when one-third expected an income reduction of more than 20 percent and two-thirds said it would be 20 percent or less.
Farmers are “less pessimistic about the direction of the U.S. ag economy in the year ahead,” wrote Purdue economists James Mintert and Michael Langemeier. “Producers were still concerned that trade conflicts will lower their farm income but scaled back their perception regarding the magnitude of the expected income reduction.”
When he announced details of the aid payments, Perdue said “we have formulated our strategy to mitigate the trade damages sustained by our farmers.” Besides the cash payments, Perdue said USDA would spend $1.2 billion to purchase, and donate, surplus food and $200 million for development of new overseas markets for U.S. ag and food. A decision will be made by early December as to whether there will be a second round of cash payments. “There is currently no plan for a second round for the other two components of the package,” said a USDA spokesman last week.
The overall measurement of producer sentiment in the Ag Economy Barometer rose to 129, up 12 points in a month, said Purdue. The current reading is close to the average of 133 so far this year. The monthly index has yo-yoed from a high of 143 in June to a low of 117 in July and back to the current 129.