Agriculture & Natural Resources
Potential Market Facilitation Program payments for corn, soybeans and wheat Sources: Dr. Todd Davis; UK Grain Marketing Specialist Throughout the implementation of tariffs, USDA has referred to a program that will assist farmers hurt by lost export markets. On Aug. 27, USDA announced the details of the Market Facilitation Program (MFP) payments designed to assist farmers affected by tariffs and reduced exports. Commodities eligible to receive an MFP payment are cotton, corn, dairy, hogs, sorghum, soybeans and wheat. This article will focus on the primary grains grown in Kentucky – corn, soybeans and wheat – and the potential payments for Kentucky grain farmers based on the September Crop Production report.
Soybeans receive the largest MFP payment rate with compensation at a rate of $1.65 per bushel. This payment reflects that China targeted soybeans in this dispute. Wheat receives an MFP payment of 14 cents per bushel, and corn receives an MFP payment of one cent per bushel. The MFP payment is made on 50 percent of the 2018 production.
Soybeans would receive an MFP payment of $47.03/acre calculated as ($1.65 per bushel x 57 bu./acre x 50%). Similarly, wheat’s payment would be $4.62 per acre, and corn’s payment would be $0.89/per acre. A grain farm in a corn-soybean rotation would expect a MFP payment of $23.96/acre (50% corn x $0.89 + 50% soybeans x $47.03). Similarly, a farm with a corn-wheat/double-crop soybean rotation would have an average payment of $26.27/acre (50% corn x $0.89+50% soybeans x $47.03 + 50% wheat x $4.62).
When farmers apply for MFP payments, they must certify their 2018 production. USDA advises farmers that they must provide “verifiable and relative production record by crop, type, practice, intended use, and acres if not already on file” to prove production. FSA will conduct spot check on farms to verify the production certified for this program.
There is a $125,000 limit for total MFP payments for grains. However, MFP payments will not be included in the payment limit for the Farm Bill ARC/PLC payments. Farmers must comply with the highly erodible land conservation and wetland conservation provisions outlined in the 2014 Farm Bill. The farmer’s adjusted gross income (AGI) must be below $900,000 for the 2014 to 2016 tax years. Farmers must also be actively engaged in farming to receive these payments.
The administration states that CCC will announce a second payment rate, if applicable, for the remaining 50 percent of the 2018 crop on or around Dec. 3, 2018. Farmers can sign up for their MFP payment at the Versailles Farm Service Agency after harvest is completed and farmers must apply before the deadline of Jan. 15, 2019.