Thursday, December 05, 2019

Studies suggest USDA overpaying some soybean farmers; other growers complain their crops are undervalued

Soybean harvest (UPI photo)
Faulty government estimates of the trade war's impact may have caused soybean growers to get more bailout money than the the trade war with China has actually cost them in sales; meanwhile, other growers may not be getting enough trade aid, Mike Dorning reports for Bloomberg.

"The U.S. Department of Agriculture’s calculations overshot the impact of the trade conflict on American soybean prices, according to six academic studies, a conclusion that is likely to add to criticism that the bailout has generated distortions and inequalities in the farm economy," Dorning writes. "The method the department used to calculate trade losses also likely overstates the conflict’s financial impact on most other farm products, though for a few commodities it may understate the true impact."

Overpayment doesn't necessarily mean a windfall for soybean farmers, since they're dealing with other financial pressures such as bad weather and global oversupply, Dorning reports: "Also, the trade conflict risks long-term loss of market share for U.S. producers as overseas customers build relationships with replacement suppliers. Neither the academic nor the USDA estimates take potential future market losses into account."

Wild blueberries in Maine's fall foliage
(University of Main Extension photo)
Blueberry farmers in Maine say the USDA is underpaying them for damages caused by the trade war. Blueberries were included in a separate, much smaller trade-relief program, Ryan McCrimmon reports for Politico's Morning Agriculture. In a letter to Agriculture Secretary Sonny Perdue, independent Sen. Angus King of Maine wrote that the trade war will lead to a 96.75% decrease in the value of the state's wild-blueberry exports to China since 2017.

Net farm income is predicted to increase about 10 percent over last year, but that's mostly because of bailout payments, which are expected to total $22.4 billion—about a quarter of all farm income, according to the USDA's latest Farm Income Forecast. "Almost 40% of projected U.S. farm profits this year will come from trade aid, disaster assistance, federal subsidies and insurance payments," Dorning reports.

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