Exports to Decline While Imports Remain Steady
USDA is cutting its estimates for shipments of soybeans and corn this year amid the ongoing trade war between the U.S. and China. That’s causing an adjustment in expectations for exports as a whole. USDA’s August 2019 Outlook says total ag exports will decline by 6.2% from last year to $134.5 billion. If those numbers hold, it would be the lowest since 2016 and the first time since then that exports did not hit the $140 billion mark.
USDA is keeping imports at a steady $129 billion. The decline in ag exports is forecast to put the U.S. ag trade surplus at $5.3 billion. That would be the smallest U.S. ag trade surplus since 2006.
Chapter 12 Debt Ceiling Increased to $10 Million
In late August, President Donald Trump signed into law legislation that increases the debt ceiling to $10 million for Chapter 12 bankruptcies.
The Family Farmer Relief Act expands farmer access to Chapter 12 debt reorganization procedures.
American Farm Bureau President Zippy Duval says the law is a sobering reflection of the current state of the farm economy, but the organization is grateful Trump prioritized this bill.
“This law relieves some of the uncertainty farmers are facing due to export market disruptions, weather events and declining farm income,” he said in a statement.
Chapter 12, a bankruptcy code created in the 1980s specifically for farmers, has been modified by Congress several times in the past 30 years. Before the Family Farmer Relief Act, the debt limit was $4.1 million to qualify.
Disaster Aid Sign-Up is Underway
Farmers affected by natural disasters in 2018 and 2019, including Hurricane Dorian, can apply for assistance through the Wildfire and Hurricane Indemnity Program Plus (WHIP+).
Crop losses due to 2018 disasters will be offset at 100% of their calculated WHIP+ payment once the application is approved. For 2019, producers who suffered crop losses because of natural disasters will initially receive 50% of their calculated WHIP+ payment. They will have an opportunity to receive up to the remaining 50% after Jan. 1, 2020, if sufficient funds remains.
The program also includes an additional prevent-plant payment for producers filing a claim. Details are still in the works but payments are expected to be 10% to 15% of the indemnity.
The payment limit on the program is $125,000; if 75% of adjusted gross income is from farming, the limit bumps up to $250,000. The maximum is $500,000 in disaster payments.