The past few weeks have been particularly turbulent for the agriculture sector. Flooding throughout the Midwest has held back planting. May ended with new questions about the future of trade with Mexico, and critical agreements like the USMCA. The Administration also made a new announcement on Market Facilitation Program payments, while leaving some details yet to be determined.
There are many questions still left to be answered on key policy issues affecting farmers and rural businesses. As we continue to advocate every day on issues affecting our industry – including the need for open trade, and the need for commonsense disaster aid for farmers – here is what we know currently and how we continue engaging with policymakers in Washington:
May started out with a positive development on trade, with the Administration announcing it would roll back tariffs imposed on steel and aluminum from Canada and Mexico. These tariffs (known as Section 232 tariffs) had resulted in retaliation from both nations and was a roadblock to Congressional approval of the U.S.-Mexico-Canada trade agreement (USMCA). That morning, Land O’Lakes, Inc. CEO Beth Ford spoke at length on Bloomberg TV regarding the critical importance of trade to the agriculture sector. You can see Beth’s appearance here.
On May 30 the Administration announced a new potential round of tariffs that would be imposed on imports from Mexico beginning June 10, however the administration announced June 7 that the new round of tariffs would not take effect.
Removal of tariffs on key trading partners, and approval of the USMCA agreement, remains a top policy priority for Land O’Lakes in 2019. Since the beginning of the year, Land O’Lakes and our member-owners have led more than 100 meetings with lawmakers and key Administration officials to advocate for an end to tariffs and approval of USMCA.
Our advocacy efforts continued during the week of June 3 as nine of our members joined the National Milk Producers Federation conference in Washington, DC. We will also be joined by twenty members later this month for the National Council of Farmer Cooperatives Washington Conference. Trade issues will remain at the top of the agenda as our members engage with lawmakers.
Market Facilitation Program
On May 23, USDA announced it will make available an additional $14.5 billion in funding under the Market Facilitation Program (MFP) in 2019, while stopping short of announcing eligibility and payment rates.
USDA said in a statement that funds will be dispersed in up to three payments, with the second and third payments evaluated as market conditions and trade opportunities dictate. The first will begin in late July/early August as soon as practical after Farm Service Agency crop reporting is completed by July 15th. If conditions warrant, the second and third will be made in November and early January. Information direct from USDA is available here.
Agriculture Secretary Sonny Perdue discussed many elements of the trade plan in an interview May 24 with AgriTalk. The latest media reports have indicated unplanted acres will not be eligible for Market Facilitation Program payments.
Land O’Lakes continues to weigh in with USDA to ensure trade assistance fully reflects the economic impact of retaliatory tariffs on U.S. producers.
The U.S. House on June 3 approved a disaster assistance bill that will include disaster aid funding for agriculture, following a strong bipartisan vote in the U.S. Senate shortly before Memorial Day. This bill includes $5.5 billion, including $3 billion in direct payments for producers affected by prevented planting, flooding of grain storage, and hurricanes and wildfires that impacted many parts of the nation last year.
USDA will be charged with implementing the disaster assistance programs and will provide additional details at a later date.
USDA has announced signup under the Dairy Margin Coverage (DMC) program will begin June 17. For more information, contact your FSA office or go here.
Resources and Analysis
Recently, economists at the University of Illinois-Champaign’s farmdoc daily blog examined MFP, the disaster aid package in Congress and producer decisions. Their analysis is available here.
The American Farm Bureau Federation also examined the lay of the land with this analysis.
And DTN/Progressive Farmer looked at the latest trade news recently, in light of the new tariff announcement.
As the farmdoc daily team identifies, “planting decisions are difficult this year due to weather, the prevent plant option, and unprecedented policy uncertainty.”
Many questions remain to be answered on the trade and policy front, and the Land O’Lakes government relations team is working every day together with our trade associations to gather information and updates. Answers and final decisions on some issues, such as the trade strategy with Mexico or eligibility of prevent plant acres in MFP, depend on announcements or clarification by the Administration.
We are engaged with policymakers and their staff members on a daily basis, and always encourage you to pass on your questions to email@example.com.