Agriculture Secretary Sonny Perdue announced on Monday the second and final round of $4.8 billion of Trump tariff payments, meaning crop and livestock producers will collect up to $9.6 billion in cash to cushion the impact of the Sino-U.S. trade war. So far, the USDA has sent $2.38 billion in payments to producers of almonds, corn, cotton, dairy, hog, sorghum, soybeans, fresh sweet cherries and wheat.
“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,” said Perdue. “This assistance will help with short-term cash flow issues as we move into the new year.”
The money was released two weeks later than expected because White House budget officials hoped for a revival of U.S.-China trade after a face-to-face meeting of President Trump and Chinese President Xi Jinping at the end of November. China purchased 1.4 million tonnes of soybeans last week but sales to the former No. 1 export customer are far below normal. The USDA estimates China will buy $9 billion worth of U.S. farm exports during this fiscal year, compared to the average of $21 billion a year before tariffs came into play.
“Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations,” said President Trump on social media. “I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments. Our economy is stronger than ever — we stand with our Farmers!”
Farm groups thanked the administration for the new payments while urging agreement on new trade pacts that would remove tariffs. The National Corn Growers Association said the payment rate to corn growers, 1 cent a bushel, was “woefully inadequate” when compared to the 44-cent drop in market prices since the trade war began.
“While this assistance package will help a number of our farm families during this year of severe economic challenge, the best way to provide lasting relief is to continue pushing for trade and tariff reform from trading partners like China, Canada, Mexico, India, Turkey and the European Union,” said Farm Bureau president Zippy Duvall. Wheat Growers president Jimmie Musick said wheat sales to China and Mexico are down by $500 million since the trade war began in early summer.
“These retaliatory tariffs are not only harming growers through loss of sales but are also placing pressure on wheat prices,” said Musick. “Growers want new export markets and trade deals so that this sort of assistance isn’t necessary.”
All told, the Trump administration will spend as much as $11 billion to offset the impact of trade war on U.S. agriculture. Besides the payments of up to $9.6 billion to producers, the USDA will spend $1.2 billion on purchases of surplus food and provide $200 million for trade promotion work by ag export groups. In July, Perdue said up to $12 billion was available. Since then, a USDA spokesman said there would be only one round of purchases of surplus food and trade promotion awards.
So far, Illinois, Iowa, Kansas and Nebraska are the leading states for payments and the top commodities for payments are soybeans, corn, wheat, dairy and sorghum, said the USDA.
The USDA said soybean growers would see a maximum of $7.3 billion in payments, based on a payment rate of $1.65 per bushel. Soybeans used to be the largest U.S. farm export to China. Up to $581 million would go to hog farmers and $554 million to cotton growers. The purchases of surplus food, for donation to charity, will include $559 million of pork and $85 million of dairy products.