USDA Announces MFP Payment Information for U.S. Farmers
On Thursday, July 25th, the U.S. Department of Agriculture (USDA) announced the details of the Market Facilitation Program (MFP) payments under the tariff and trade relief initiative of the Trump Administration. The program is the second such program in the last two years, and it’s designed to offset economic losses faced by U.S. farmers as a result of ongoing trade disputes with U.S. trading partners. The 2019 program varies some from the 2018 program, but there are similarities.
Payments under the 2019 program are formulated on a county by county basis rather than directly to any particular farm operation. The payments appear to be based on a formula that places payment amounts on each commodity and distributes out a total payment rate based on distribution of acreage of affected commodities in those counties. Based on the breakdown of county payment rates for Arkansas, Cotton appears to be the commodity with the greatest payment rate.
Cotton has seen futures market declines of roughly $.30/lb in recent months, largely due to declining demand from China as a result of the trade dispute. This decline has been felt while other commodities like corn and soybeans have seen futures market improvements in recent months. It’s unclear how future tranches of payments for the 2019 will be structured. The second and third tranches will evaluated as market conditions and trade opportunities dictate. If conditions warrant, the second and third tranches would be made in November and early January, respectively, according to USDA.
Payments under this year’s program also come with a $250,000 payment limit with AGI limits similar to the 2018 farm bill. Initial payment will be comprised of the higher of either 50 percent of a producer’s calculated payment or $15 per acre, which may reduce potential payments to be made in tranches two or three. USDA will begin making first tranche payments in mid-to-late August. Sign up will begin Monday, July 29th, and the program will once again be operated through the Farm Service Agency (FSA).
MFP payments will also be made to producers of almonds, cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, hazelnuts, macadamia nuts, pecans, pistachios, and walnuts. Each specialty crop will receive a payment based on 2019 acres of fruit or nut bearing plants, or in the case of ginseng, based on harvested acres in 2019.
Acreage of non-specialty crops and cover crops must be planted by August 1, 2019 to be considered eligible for MFP payments.