Trump announces $16bln aid package, no per bushel figure given

The US government on Thursday formally announced an aid package to farmers worth $16 billion to compensate them for what they said was unfair retaliatory measures in its trade war with China. 

However, despite earlier reports that soybean farmers would receive up to $2/bu in aid for lower soybean prices, the US undersecretary for farm production and conservation Bill Northey said the government will not give any monetary figure.

We want to make sure farmers are "planting for the market" and that "folks have complete flexibility during this challenging planting season".

Alongside soybeans, farmers of other non-specialty crops including corn, wheat, rapeseed, rice and peanuts will also be eligible for the aid. 

Of the $16 billion, $14.5 billion will be allocated toward producers with the remaining sum allocated toward domestic food distribution and developing new international markets for US crops. 

Producer payments will be calculated at a single rate for each county, determined by how much “trade damage” that area has received and the numbers of acres farmed rather than on a particular crop, Bill Northey added. 

Specific dollar per bushel figures were not given to prevent market influence, but payments are likely to be more generous than the previous round of aid last year because of a higher $14.5 billion figure allocated toward producer payments versus $10 billion last time.

The first payments will be made in July or August with two more payments to follow by early 2020.

“But we are hopeful of a trade agreement before further payments [after August],” Northey said.

Following a report by Bloomberg on Tuesday which reported soybean farmers would receive payments of $2/bu against 63 c/bu for wheat and 4 c/bu for corn, Chicago futures fell by 10 c/bu in an hour to hit $8.29/bu by 1400 Eastern time, offsetting a previous rise because of wet weather that has delayed new crop planting.

On Thursday, futures movements have been more muted since the announcement, stabilising at $8.24-8.26/bu at time of press.