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MFP May Be Required in 2020 if Exports to China do not Eventuate

03/02/2020

Despite optimism demonstrated by the White House regarding exports of agricultural commodities to China there is a possibility that a 2020 Market Facilitation Program (MFP) will be necessary.  Bill Northey, USDA Under-Secretary noted that no final decision has been made on MFP but the anticipation is that sufficient trade will take place that payment to farmers will be unnecessary.  Interviewed at the Commodity Classic on February 27th Northey noted, “I believe China is committed to Phase-One.  We have seen them reduce some tariffs.  We have seen them encourage domestic buyers to purchase from the U.S.”  He added “I would say later this year, looking at the 2020 crop, we will get a sense as to whether we are seeing trade step-up in a way that it feels back to a normal situation.”

 

While President Trump did indicate the possibility of MFP payments Northey noted that there is no assurance of a program in 2020 and a decision will depend on market performance.

Under-Secretary of the USDA. Bill Northey