1st round of ag payouts set, uncertainty lingers


By Josh Ellerbrock - jellerbrock@limanews.com



In this photo taken Nov. 2009, central Illinois corn farmers harvest their crops near Waverly, Ill. While a Senate vote to end a tax credit that's helped build the ethanol industry in the United States signals that the subsidy's days may be numbered, corn farmers and ethanol makers hope they can convince Congress to compromise and agree to preserve but reduce subsidies. But agricultural economists say the ethanol industry has grown up over the last few years and doesn't need the help, and they doubt farmers or their customers in the ethanol industry would be hurt much if the subsidy dies. (AP Photo/Seth Perlman)

In this photo taken Nov. 2009, central Illinois corn farmers harvest their crops near Waverly, Ill. While a Senate vote to end a tax credit that's helped build the ethanol industry in the United States signals that the subsidy's days may be numbered, corn farmers and ethanol makers hope they can convince Congress to compromise and agree to preserve but reduce subsidies. But agricultural economists say the ethanol industry has grown up over the last few years and doesn't need the help, and they doubt farmers or their customers in the ethanol industry would be hurt much if the subsidy dies. (AP Photo/Seth Perlman)


LIMA — This past week, farmers could file paperwork to claim a portion of the first round of federal funds meant to plug the hole in the markets caused by retaliatory tariffs, but heavy uncertainty surrounding the agriculture industry remains as the harvest season begins to rev up in earnest.

As of Sept. 4, farmers can now apply to the U.S. Department of Agriculture’s market facilitation program, which sets the initial payment rates for agricultural commodities. In total, the first payouts will use $4.7 billion to curb damage caused by falling commodity prices.

Soybeans have taken the brunt of the hit as the export market shrank since the U.S. trade war with China began in April. For that reason, soybeans have also received the highest percentage of trade mitigation funds, set at $3.6 billion, or $1.65 a bushel for half of the total soybean crop.

Hardin County Ag and Natural Resources Educator Mark Badertscher said the combination of the federal payouts and good yield year should help soybean farms.

“The bean price is a couple dollars lower than it was last year. So even though we can balance that out with higher yields, we’re still dealing with the impacts of the markets. Hopefully, it will help us work it out,” Badertscher said.

But while soybeans may see a bump, the corn crop may have a harder time. Trade mitigation funds have set aside $96 million, or a penny per bushel, for the corn crop — a price that’s little more than a pat on the head, said John Torres, director of government and industry affairs with the Ohio Corn and Wheat Growers Association.

The USDA released its methodology for the $0.01 per bushel corn price just this Friday, which set the estimated trade damage at $192 million. Torres said that formula fails to consider both ethanol and feed exports that make up the corn industry.

“A penny per bushel is a big slap in the face for corn growers,” Torres said. “While we appreciate the administration recognizes there’s a problem in trade, there’s simply not enough money in the U.S. Treasury to make U.S. farmers whole.”

“Corn is going to be a crop that looks like it’s going to be hard to make money this year,” Badertscher said.

While Van Wert County farmer Nick Williams said he plans to sign up for a portion of the trade mitigation funds, he’s not relying on the payout to survive.

“It’s definitely going to be a bonus, and I’m going to take advantage of it. But it’s not a make or break deal,” Williams said. “I’ve been through this before, and hopefully, I’ll make it through again.”

Williams said he supports President Donald Trump’s initiatives in trying to “level the playing field,” even if it means farmers having to take some economic damage to make it happen, and that prior to 2014, market prices had created some strong returns for local farmers.

“We had some phenomenal good years,” Williams said. “Now we’re back to reality. We’re going to have to make it work for us. We’ll have to cut some costs and make it work.”

Torres said 2018, however, may just be the tip of the iceberg of a lot of long-term damage if the federal trade war with China continues. As long as the tariffs remain in place, Chinese buyers will look to outside markets, break off current trade relationships with American markets and look to other countries to make up any shortfalls.

“I’m worried about 2019,” Torres said. “Farmers are making the decisions about what they’re going to do next year — what kind of feed they’re buying, what fertilizer, their marketing plan. It makes the 2019 market year uncertain if these trade disputes don’t get settled.”

In this photo taken Nov. 2009, central Illinois corn farmers harvest their crops near Waverly, Ill. While a Senate vote to end a tax credit that's helped build the ethanol industry in the United States signals that the subsidy's days may be numbered, corn farmers and ethanol makers hope they can convince Congress to compromise and agree to preserve but reduce subsidies. But agricultural economists say the ethanol industry has grown up over the last few years and doesn't need the help, and they doubt farmers or their customers in the ethanol industry would be hurt much if the subsidy dies. (AP Photo/Seth Perlman)
https://www.limaohio.com/wp-content/uploads/sites/54/2018/09/web1_Harvest.jpgIn this photo taken Nov. 2009, central Illinois corn farmers harvest their crops near Waverly, Ill. While a Senate vote to end a tax credit that's helped build the ethanol industry in the United States signals that the subsidy's days may be numbered, corn farmers and ethanol makers hope they can convince Congress to compromise and agree to preserve but reduce subsidies. But agricultural economists say the ethanol industry has grown up over the last few years and doesn't need the help, and they doubt farmers or their customers in the ethanol industry would be hurt much if the subsidy dies. (AP Photo/Seth Perlman)

By Josh Ellerbrock

jellerbrock@limanews.com

Reach Josh Ellerbrock at 567-242-0398.

Reach Josh Ellerbrock at 567-242-0398.

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