Farmers are now learning how much aid they can expect to receive from a $12 billion package that President Donald Trump announced earlier this month.
The U.S. Department of Agriculture released the figures Wednesday for how much aid per acre farmers can plan on for each row crop. The details arrived after most farmers have already met with their bankers to arrange financing for next year’s crops and placed orders for the seed and fertilizer they will need. But officials have promised that the payments should arrive by the end of February.
Soybean farmers have been hit especially hard by Trump’s trade war with China, which stopped buying any American crops after Trump announced his tariffs this spring. China is the world’s largest buyer of soybeans. This aid package is expected to help farmers weather the trade disruptions until China buys more soybeans under an agreement announced in October and until provisions of Trump’s massive budget bill take effect later this year.
Soybean farmers will get $30.88 per acre while corn farmers will receive $44.36 per acre. Another crop hit hard when China stopped buying was sorghum, and those farmers will get $48.11 per acre. The amounts are based on a USDA formula on the cost of production.
Farmers say they need more buyers for their crops
But farmers say the aid won’t solve all their problems as they continue to deal with the soaring costs of fertilizer, seeds and labor that make it hard to turn a profit right now. Some agricultural trade groups have said they worry that thousands of farmers could go out of business, but others have said they believe most farmers have the financial resources and equity needed to survive.
Kentucky soybean farmer Caleb Ragland, who was president of the American Soybean Association until recently, said the aid is “a Band-Aid on a deep wound. We need competition and opportunities in the market to make our future brighter.”
The President of the National Corn Growers Association Jed Bower also urged the Trump administration to focus on cultivating additional uses for their crops. Farmers will benefit from having more buyers whether it is for ethanol and animal feed at home or for international markets.
“Corn growers have been sounding the alarm about the fact that farmers have been faced with multiple consecutive years of low corn prices and high input costs,” Bower said. “While this financial assistance is helpful and welcomed, we urgently need the administration and Congress to develop markets in the United States and abroad that will provide growers with more long-term economic certainty.”
Agriculture Secretary Brooke Rollins said that is the goal and promised to continue working to open new markets while strengthening the safety net for farmers.
Minnesota Soybean Growers Association President Darin Johnson said the aid number for soybeans fell short of what farmers had been hoping for, so more help could be needed, though this package will help.
Most farmers remain steadfast supporters of Trump even after the disruptions caused by the trade war. They generally support many of his other policies and believe they will get a better trade deal in the end.
White House and farmers encouraged by China’s purchases
These aid payments will add up to $11 billion for row crop farmers who raise corn, soybeans, wheat, sorghum and other crops. Another $1 billion has been set aside for specialty crops and sugar, but the administration hasn’t released any details of aid for those crops.
After Trump met with Chinese leader Xi Jinping in South Korea in October, the White House said Beijing had promised to buy at least 12 million metric tons of U.S. soybeans by the end of the calendar year, plus 25 million metric tons a year in each of the next three years. Officials have said China is on track to meet the 12 million metric ton goal by the end of February.
As of Dec. 18, China had bought about 6 million metric tons of soybeans, according to the latest USDA’s weekly report. Separately, the federal agency reported that China since then bought at least three more batches totaling 600,000 metric tons.
Beijing has yet to confirm any commitment to buying 12 million metric tons of soybeans for this season, but the Chinese embassy in Washington said earlier this month that “agricultural trade cooperation between China and the United States is proceeding in an orderly manner.”
However, the recent increase in international purchases is encouraging to farmers, said Tim Lust, CEO of the National Sorghum Producers, who has seen more than 1 million metric tons of sorghum purchased in just the past few weeks. Like soybeans, more than half of the sorghum crop is exported each year with China traditionally being the biggest buyer.
The aid payments will be capped at $155,000 per farmer or entity, and only farms that make less than $900,000 in adjusted gross income will be eligible. During the first Trump administration, a number of large farms found ways around the payment limits and collected millions.
The USDA says the average size of the 1.88 million farms nationwide was 466 acres last year, but many farmers are much larger than that as larger operations have continued to buy up neighboring farms over time.
This story was originally featured on Fortune.com
