President Trump announced a $16-billion aid package on Thursday to buffer the impact of the trade war on farmers and ranchers this year. Speaking separately to reporters, Agriculture Secretary Sonny Perdue said billions of dollars of additional aid may flow in the future.
Higher grain and soybean prices will increase U.S. net farm income modestly this year, said a University of Missouri think tank on Monday. The Food and Agricultural Policy Research Institute projected a $5.5 billion increase in net farm income, a broad measure of profits, compared to 2018, in line with a USDA estimate of a $6.3 billion increase.
The USDA forecast net farm income of $69.4 billion this year. If accurate, the total would be the third year of net income below $70 billion since 2015. “We’re starting to see ... a new average coming out here,” said USDA economist Carrie Litkowski on Wednesday.
After hitting a pothole in 2018, U.S. net farm income will recover this year under the combined effects of financial belt-tightening and rising crop prices, said the USDA on Thursday. It projected net farm income of $77.6 billion in 2019, which would be the highest total since the commodity boom collapsed in 2014.
Persistently low commodity prices are pushing some farmers to the financial edge, said the chairmen of the Senate and House Agriculture committees on Thursday. "We are in a very tough spot," said Senate Ag chairman Pat Roberts. The House Ag chairman, Collin Peterson, said "we are not in crisis yet" but said that continued sour conditions would sap the finances of a growing number of farmers.
With Trump tariff payments boosting Corn Belt farm revenue, farmer confidence shot to its highest level since last June, just before the trade war began against China, said the monthly Ag Economy Barometer published by Purdue University. Producers polled by Purdue said they expect ag exports to increase in the years ahead, an indirect sign they expect a beneficial resolution with China.
The Sino-U.S. trade war, which as stymied U.S. farm exports, "is going to be a long one, and we keep delivering the message, 'We're with you, Mr. President,'" said the leader of the largest U.S. farm group on Sunday, adding a caveat. "The runaway of our patience is going to be determined by the financial situation of our farms. We went into the battle very weak." (No paywall)
There are many challenges facing rural America, said the new House Agriculture chairman, Collin Peterson. "There is a new farm bill to implement, a growing economic storm in farm country to address, and the ongoing harm of a trade war to alleviate, not to mention the range of unforeseen issues that will test the mettle of the people we’re here to serve," said Peterson in a statement over the weekend.
U.S. farm income will be slightly higher than expected this year due chiefly to $4.7 billion in Trump tariff payments that will buffer the impact of trade war on commodity prices, says the USDA. With the bailout, farmers are forecast to collect $13.6 billion in direct farm payments, the largest amount in 12 years.