President Donald Trump (R) said on Twitter that farmers would get more aid payments but Agriculture Secretary Sonny Perdue (L) said this week that more aid is unlikely. Photo by Kevin Dietsch/UPI | License Photo
EVANSVILLE, Ind., March 6 (UPI) -- Farmers were left bewildered this week after Agricultural Secretary Sonny Perdue reiterated that another round of trade aid payments this year was unlikely despite what the president has said.
The announcement, made at a House Agriculture Committee meeting Wednesday, came less than two weeks after President Donald Trump tweeted that if farmers needed aid before the administration's new trade deals are fully implemented, "that aid will be provided by the federal government."
The mixed messages have left farmers uncertain what the year will bring.
"I don't think we can plan on [trade aid] happening," said Scott VanderWal, a South Dakota soybean grower and the president of the South Dakota Farm Bureau. "We have to put our budgets together without it."
That means a lot of uncertainty will prevail within the farming community this year, VanderWal said.
Commodity prices remain low as trade with China has yet to resume in earnest. China has promised under the phase one deal to buy large quantities of American agricultural products -- $80 billion over the next two years-- but industry experts question whether it is capable of fulfilling the promise.
Early signs are not good.
The outbreak of coronavirus in China has dramatically slowed trade and reduced demand. The movement of goods in and out of ports is slow as workers stay home.
"We've still not made one real sale [of soybeans] to China," said Mark Watne, president of the North Dakota Farmers Union.
It could be some time before China makes a large soybean purchase, Watne said. The phase one deal stipulates that China will make purchases based on market considerations. Currently, Brazilian soybeans are cheaper.
China might increase purchases of other agricultural products, such as dairy, meat and fresh produce, but that also is unclear. And until the coronavirus threat passes and normal trade resumes, little will be moving in and out of the country.
"Is the trade situation solved? It doesn't appear to be," said Mike Stranz, policy director for the National Farmers Union. "And if it isn't, why are we turning away from trade aid this year?"
The Trump administration has given farmers roughly $28 billion in assistance since the trade war with China began in summer 2018. High retaliatory tariffs on farm goods severely reduced trade between the two countries, causing commodity prices to plummet and leaving some goods -- like soybeans -- sitting in farm grain bins waiting for a buyer.
"The [Market Facilitation Program] payments made quite a difference for a lot of us," soybean grower VanderWal said. "For some, it was the difference between making a profit or not. For some, it just made the loss smaller. It might have kept some people in business."
Farms struggled despite the aid, he said. Farm bankruptcies in 2019 rose 20 percent, according to the American Farm Bureau Federation.
"The phase one deal is a good sign," said Josh Gackle, a soybean grower in North Dakota. "But now we really need the beans to start moving. Prior to 2018, 70 percent of North Dakota's soybeans went to China. We need the ships to start moving. And that's not happening yet."
Despite Perdue's comments, Stranz said he believes that -- unless China suddenly starts making large purchases before summer -- the Trump administration will offer more trade assistance.
"The [United States Department of Agriculture] has to be a little more sensitive to making announcements that may or may not impact the market," Stranz said.