The US government will provide up to $16bn to US farmers this year to offset the impact of the ongoing trade dispute with China, up from $12bn pledged last year.
A second year of the market facilitation program (MFP) will see $14.5bn in direct payments to a broad array of arable, livestock and fruit producers, the US Department of Agriculture (USDA) said today.
The list of eligible products is broader than last year but, like last year, most payment is expected to be made to soybean, corn and wheat farmers.
MFP payments will be made in a way that aims not to distort current farmers' spring planting decisions, the USDA said without providing details. USDA said acres eligible for support payments could not exceed total 2018 plantings.
Payments will be made in 2-3 tranches, with the first payments made in late-July/early-August and subsequent payments dependent on market conditions.
Senate finance committee chairman Chuck Grassley (R-Iowa) said the aid could provide payments of close to $2/bushel on soybeans and 75¢/bushel on corn, at a briefing yesterday.
Many in the market are concerned that the new soybean subsidy will lead to even more soybeans being added to the already well-supplied marketplace, as producers chase the extra premium. If realized, farmers risks depressing commodity prices even after the current trade dispute is resolved.
