Cotton, Soybeans Heavily Influenced MFP 2019 Payment Rates

MFP By County 07/26/19 AgDay
The numbers are finally in on the second round of China trade aid. We have team coverage and important numbers you need to know. Plus, we survey the corn crop in Kansas and a garden that's about much more than flowers.
The Southern tier of states will see the biggest MFP payments in 2019, but Jim Wiesemeyer thinks MFP 2019 will be very beneficial for the health of the farm economy. ( Farm Journal )

As producers sift through the details surrounding the next round of Market Facilitation Program (MFP) payments, some producers will see a larger payment than they expected. The amount for the 2019 program is based on the county in which you reside, with payments ranging from $15 to $150 dollars per acre.

After USDA released the details Thursday, a breakdown of payments showed the biggest payments going to the southern tier of states. Alabama has five countries that will see the maximum payment of $150 dollars, and 22 counties will receive more than $100 per acres. However, the payments vary largely by county.

“No counties in Ohio, Indiana, Iowa, Illinois, Minnesota and the Dakotas, that I saw, will get a payment rate above $100 an acre,” said Jim Wiesemeyer, Farm Journal Washington Correspondent. “But Texas and Georgia have 35 and 51 counties, respectively, above $100 an acre. Now, that's because of the cotton domination in those counties. “

David Widmar, Agricultural Economic Insights, says the large payment rates came as a bit of a surprise to some.

“I think anytime you see $100-plus-dollars-an-acre payment, I think that that definitely caught people’s attention,” he said.

Widmar thinks cotton and soybeans heavily influenced the payments. So, counties that produce more of those crops will receive larger payment rates in 2019. However, just because a county is seeing a rate of $100 or more that doesn’t mean that county will see the bulk of the payments.

"It's worth noting these are dollars per acre. But those southern states, in the southeast and in the southwest, don't have a whole lot of acres that get paid out,” he said. “If we looked at this on dollars, and transfer that to the county level, we would expect the central Corn Belt like Illinois and the Delta region to be the big areas where you have a big-acre number combined with a big payment rate number, and so you get a big total county number.

Wiesemeyer said the average payment rate nationwide will be between $60 and $70. In Illinois, a county like McLean will be above average, with a rate of $82.

“But I think that's the exception rather than the rule,” Wiesemeyer said. “For corn producers, this definitely is a more favorable program.”

Wiesemeyer said he thinks it’s a better overall program, because it’s a major cash-flow infusion that he says is desperately needed in farm country right now.

“Even though I personally don't like county programs, because you're going to continue to get the disparities within a county, Secretary Sonny Perdue acknowledged that there are going to be differences between counties and regions. But basing payments on county rates, he said, was the fairest way to distribute the trade aid.”

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