While agricultural commodity groups thanked and praised the Trump administration for $16 billion in aid to help cover losses from tariffs, several also noted what they really need is a return of normal trade to grow markets.
Continued trade wars erode markets that can be hard to get back, some said.
“We have invested heavily in developing the market for California almonds in China for more than 20 years and hope the administration is successful in negotiating a new trade deal soon so we can back to business as usual,” said Holly A. King, chair of the Almond Board of California, who attended a May 23 briefing at the White House by President Donald Trump.
“While we appreciate almonds’ inclusion in the second package (of USDA tariff relief) … getting back to normal trade is critical,” said Julie Adams, the Almond Board’s vice president in Modesto.
China is the third largest export market for California almonds. August through April exports to China were 106.6 million pounds, down 33% from the same period a year earlier.
Producers of tree nuts, fresh sweet cherries, cranberries and fresh grapes will receive direct payments based on 2019 acres of production.
Of the $16 billion, $14.5 billion is direct payments to growers through the Market Facilitation Program, $1.4 billion is for surplus commodity purchases and $100 million is for Agriculture Trade Promotion.
The Pacific Northwest fresh sweet cherry industry will begin a two-month harvest of a forecast 23.6 million, 20-pound box crop on about June 10.
China was the industry’s top export market but fell behind Canada in 2018 because of a 50% tariff imposed as part of the ongoing trade war.
The volume was 1.4 million boxes, down from 3 million in 2017. Lost sales and less return to growers conservatively amounted to $86 million based on industry numbers, Mark Powers, president of Northwest Horticultural Council, in Yakima, Wash., said last September. He could not be reached for an update.
Cherry growers hope to sell 1 million boxes to China this year.
More cherry growers will be eligible for MFP because of a budget provision secured by Rep. Dan Newhouse, R-Wash., and Sen. Maria Cantwell, D-Wash.
California Farm Bureau Federation President Jamie Johansson, who was also at the May 23 White House briefing, said CFBF appreciates the new aid.
He said it provides assistance to more California-grown crops not previously included in certain programs, specifically MFP for walnuts, pistachios, table grapes and potentially others.
“Farm Bureau worked with members of Congress advocating more fruit, nut and other specialty crops in the package to help buffer rural California from the impact of trade disputes and we thank the administration for doing that,” Johansson said.
Andy LaVigne, president and CEO of American Seed Trade Association, also issued a statement of appreciation, saying, “America’s farmers are being hard hit by the current trade environment” and that many sectors of the seed industry are feeling second-hand impacts.
National Corn Growers Association President Lynn Chrisp, who was also at the White House briefing, called on USDA to update MFP payment rates. He said losses averaged 20 cents per bushel from May 2018 to April 2019, but that as trade talks with China lagged losses widened to 40 cents per bushel.
Robert Hensley, a partner in the international law firm Dorsey & Whitney, said that while details are still forthcoming, MFP relief will probably be similar to the past in that eligible farmers must have an average adjusted gross income of less than $900,000 and payments, based on production records, were capped at $125,000 per farmer for dairy, hogs, corn, cotton, sorghum, soybeans and wheat.
The $14.5 billion in MFP will provide direct payments to producers of: alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton and wheat.
Payments will be based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions, USDA says.
Total payment-eligible plantings cannot exceed total 2018 plantings.
Dairy producers will receive a per hundredweight payment based on production history and hog producers will receive a payment based on hog and pig inventory for a later-specified time frame.
Producers of tree nuts, fresh sweet cherries, cranberries and fresh grapes will receive a payment based on 2019 acres of production.
These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities, and to expand and develop new markets at home and abroad, according to USDA.
Payments will be made in up to three tranches — or portions — with the second and third tranches evaluated as market conditions and trade opportunities dictate.
The first tranche will begin in late July and early August as soon as practical after Farm Service Agency crop reporting is completed by July 15. If conditions warrant, the second and third tranches will be made in November and early January.