The federal government will make a promised second round of payments to farmers affected by tariffs, easing some uncertainty but not solving the larger problem of trade disruption that has been a drag on profits since the summer.
"While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations," Agriculture Secretary Sonny Perdue said in a statement. "This assistance will help with short-term cash flow issues as we move into the new year."
U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, agreed on Dec. 1 to a short-term stop in escalating tariff disputes that have disrupted the flow of hundreds of billions of dollars of goods, including soybeans to China.
China is typically the largest importer of U.S. soybeans in the world, by far, and the flow of soybeans to that country stopped in the summer, only to open slightly in December when Chinese buyers purchased 1.1 million metric tons of soybeans after the talks resumed.
So the soybean farmers were particularly hard hit by the Chinese tariffs. They will receive about 75 percent of the total $9.6 billion in aid. Hog, corn, dairy, almond, cotton, sorghum, cherry and wheat producers also are eligible for payments under the program, which was first announced in July.
Soybean growers will get $1.65 per bushel of their 2018 harvest, up to $125,000 per farm.
Up until this week's announcement, farmers were guaranteed 82 cents per bushel in aid on soybeans, and this second half of the payment could help push many farmers over break-even for the year.
"I think everybody will be all right for this year. I'm more worried about the following year," said Joel Schreurs, a farmer west of Marshall. "It will help, but in the long run what we need is to export our soybeans."
Farmers who sold grain ahead in the spring on the futures market are at an advantage, as are those whose crop was average or above average, since the government assistance is paid by the bushel, Schreurs said.
The large amounts of soybeans in storage, however, remain a problem, said Schreurs, as do the lower prices offered to soybean farmers in northern Minnesota and North Dakota because of their proximity to the Chinese market.
"If these beans that are warehoused aren't exported, we're going to have a glut of soybeans," Schreurs said.
Adam Belz • 612-673-4405 • Twitter: @adambelz
