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USDA Announces Details of Market Facilitation Support Program

USDA Announces Details of Market Facilitation Support Program

Upland and extra-long staple cotton are among a host of U.S. farm products eligible for payments as part of a $16 billion package through the Market Facilitation Program (MFP), Food Purchase and Distribution Program (FPDP), and Agricultural Trade Promotion Program (ATP).

Guidelines of the program were announced July 25 by U.S. Secretary of Agriculture Sonny Perdue. The program is designed to support U.S. farmers and ranchers impacted by retaliatory tariffs on U.S. agricultural goods and other trade disruptions.

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“The details we announced today ensure farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe,” said Perdue. “Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers.

“Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

According to program details:

  • MFP signup at local Farm Service Agency (FSA) offices will begin Monday, July 29 and end on Friday, December 6, 2019.
  • The first tranche of payments is expected to be made in mid-to-late August, followed by the second and third tranches likely in November and January based on continued evaluation of market conditions and trade opportunities.
  • In addition to cotton, other non-specialty crops covered under the program include alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale and wheat.
  • MFP assistance for non-specialty crops is based on a single county payment rate multiplied by a farm’s total plantings of MFP-eligible crops in aggregate in 2019. Those per-acre payments are not dependent on which of those crops are planted in 2019. A producer’s total payment-eligible plantings cannot exceed total 2018 plantings.
  • Acreage of non-specialty crops and cover crops must be planted by August 1, 2019 to be eligible for MFP payments.
  • County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county.
  • Dairy producers in business as of June 1, 2019, will receive a per hundredweight payment on production history, and hog producers will receive a payment based on the number of live hogs owned on a day selected by the producer between April 1 and May 15, 2019.
  • MFP payments will also be made to producers of almonds, cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, hazelnuts, macadamia nuts, pecans, pistachios, and walnuts. Each specialty crop will receive a payment based on 2019 acres of fruit or nut bearing plants. Payments for ginseng will be based on harvested acres in 2019.

Per-acre non-specialty crop county payment rates, specialty crop payment rates, and livestock payment rates are all currently available online at farmers.gov.

AMS will buy affected products in four phases, starting after October 1, 2019 with deliveries beginning in January 2020. USDA’s Foreign Agricultural Service (FAS) will administer the ATP, providing cost-share assistance to eligible U.S. organizations for activities to help U.S. farmers and ranchers identify and access new export markets.

“Timely” Assistance, Says Cotton

In a statement issued by the National Cotton Council, Mike Tate, NCC chairman, conveyed the cotton industry’s appreciation of the Trump Administration for recognizing the economic pressures caused by trade tensions with China. He called the assistance “timely,” as U.S. cotton’s economic health is deteriorating.

Cotton futures prices have fallen by 30 cents per pound since summer 2018, equating to about $250 less revenue per acre for a producer with average yields.

“No doubt that this downward price pressure is due in large part to cotton sales to China being substantially below the level that was expected in absence of tariffs,” Tate said. “On top of that, U.S. cotton has lost market share in China to Brazil and Australia, and pressure is building in the distribution chain as U.S. cotton exports lag and stocks build.”

Tate said that significant cancellations and deferrals of U.S. cotton sales to China (1.2 million 480 lb. bales) have occurred over the past year. He said that although there have been press reports of recent possible cotton purchases by China, the reported quantities are insufficient given the rising stocks and exportable supplies expected for the 2019 U.S. cotton crop.

“We realize that President Trump is working to address long-standing market access barriers and structural concerns, but we encourage the Administration to look at all options to increase U.S. cotton’s global competitiveness,” Tate added.

Tate said the U.S. cotton industry also is grateful to the Administration for its allocation under the ATP to promote cotton and cotton manufactured products.

“This allocation will enable the NCC’s export promotions arm, Cotton Council International, to continue positioning U.S. cotton as the “The Cotton the World Trusts” and expand international demand for U.S. cotton fiber, yarn and other cotton products.”

Based on information provided by USDA and the National Cotton Council