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July 24, 2019 | FBN Insights | Kevin McNew

Farmers to Receive Minimum $15/Acre if Hurt by Trade War

Payout could be first of three tranches this year with second two dependent on market conditions

U.S. Farmers to Receive Minimum $15 per Acre if Hurt by China Trade War

News about an aid package that includes $15 minimum per acre payout to US farmers was released Tuesday.

Farmers who were hurt by the China trade war are eligible; additional details are expected by Friday.

This payout could be the first of three tranches this year with the second two dependent on market conditions.

The assistance is expected to total about $16 billion, which follows last year’s $12 billion payout because of sales losses from trade disputes.

This year’s payout system will have a single payment rate per county, calculated by damages in the area.

What It Means for the U.S. Farmer: While the payout program will be welcomed by producers, the $15 minimum per acre total is marginal compared with expenses incurred. This could ease lending pressure, but farmers are advised to not depend on potential payouts. FBN’s marketing advising group looks for eventual strength in corn futures and advises producers to be patient and watch for recommendations.  Contact your local FMA for details.   


Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture cancellations of export sales of 100,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.


China Crushers in No Hurry to Buy U.S. Soybeans

Five Chinese crushers are eligible for tariff exemptions on US soybean cargoes, if they apply, according to Reuters.

But, US soybeans are not competitive compared with Brazilian soybeans and may not be competitive until harvest arrives for the US crop.
China’s current 25 percent tariff on US shipments has slowed US soybean exports to China, but in a goodwill gesture, China officials looked to boost US soybean supplies to China, offering exemptions to a select few crushers for cargoes arriving before the end of the calendar year.

Poor crush margins and slowing demand also are hampering interest in US soybeans.

What It Means for the U.S. Farmer: At FBN, we are not overly confident that Chinese interest in US soybeans will pick up significantly in the coming months. Both sides appear reluctant to reach a firm agreement on trade terms. Supply concerns remain present for the soybean crop with FBN expecting strength in soybean futures despite the lack of Chinese interest in US soybeans. 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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