(St.Joseph,MO) For Missouri farmers like Andy Kapp, tariffs being imposed on US grain products from foreign markets are starting to take a toll.
Kapp grows soybeans and corn on a family farm in Clarksdale,Missouri and said the tariffs have left his business in a holding pattern.
"In northwest Missouri we are seeing lower grain prices from market uncertainty and a big part of that is the tariffs,” Kapp said. “A lot of the corn from Missouri goes on rail and will go to the southwest, a majority of that will go to Mexico. That market has been up in the air, you don’t know if you can count on it six months out or a year out, so all of our outlets are just starting to slow down, or putting on the breaks to see what happens before they make big commitments.”
In response the USDA is working to help farmers pay for some of those losses through the Market Facilitation Program (MFP).
Allyson Wells, Executive Director of the Buchanan and Andrew County Farm Service Agency(FSA), said the program allows farmers to apply for assistance.
"The Marketing Facilitation Program is a new program that we are going to be implementing to try to offset some of the losses to revenue for 2018, due to the tariffs that have been imposed in selling our grain crops to foreign countries,” Wells said.
Applicants are required to file a report with the FSA detailing how many acres they manage and the amount of crops yielded. Farmers will be compensated based on the yield of their crops and/or the number of head of livestock as of August 1.
The initial MFP rates will be six cents per pound of cotton; one cent per pound of corn;12 cents per cwt. of dairy; 86 cents per bushel of sorghum;$1.65 per bushel of soybeans; 14 cents per bushel of wheat and $8 per head of hog.
"They [the USDA] have set a particular dollar figure of what they are going to compensate to the producers. Then it will be at a 50 percent rate that we will be paying to them,” Wells said.
Despite the additional funds, Missouri farmers could still be coming up short due to the drought’s impact on crop yields.
"Someone who's going to get paid on 200 or 250 bushel corn, and some of our guys maybe are going to get paid on 50 or 75 bushel corn. The impact of that to our area I think is really sad,” Wells said.“Not only are we having a short crop, but we're also not going to be able to benefit from this program to the full extent.”
Kapp said during the drought of 2012, prices ranges from five to seven dollars per bushel of corn, and the unpredictability of the current market makes it difficult for farmers to plan for next year's crops.
"A lot of these decisions we make on fertilizers and seed and even marketing our crop are six months to a year ahead. So our crystal ball or our ability to forecast what next year will be or even the prices that we will get from this crop are really uncertain,” Kapp said.
Kapp said while the tariffs are difficult to work with, he feels they could be necessary to straighten out how the US handles trade.
“I think China, maybe Mexico and Canada have taken advantage of our trade practices in the past and we needed a correction,”Kapp said. “If we can have short-term pain and long-term results we would be happy to help carry that load, but if we wether this storm and nothing gets corrected that will be the worst case scenario.”
MFP payments will be capped per person at a combined $125,000 for dairy production or hogs.MFP Payments are also capped per person at a combined $125,000 for corn, cotton, sorghum, soybeans and wheat.
The Farm Service Agency will be accepting applications for the Market Facilitation Program from September 4 through January 15, 2019.