The Impact of the Market Facilitation Program on U.S. Soybean, Sorghum and Corn Producers

The second quarter 2018 issue of Choices focused on the current trade war between the United States and China. The authors of this theme explained the state of the conflict at the time of publication (May 2018) and detailed some of the likely impacts of Chinese tariffs on U.S. agricultural exports levied in response to U.S. tariffs on Chinese exports to the United States. Zheng et al. (2018); Taheripour and Tyner (2018); Hansen et al. (2018); Liu, Robinson, and Shurley (2018); and Countryman and Muhammad (2018) predicted dramatic effects for U.S. production and trade of commodities such as soybeans, corn, sorghum, and other food and feed grains; cotton; and wine. The first exchange of tariffs between the United States and China occurred in early 2018 and was followed by a second round in April. It appears that corn, sorghum, and soybean producers who meet all the requirements for receiving MFP payments will be more than compensated for any losses caused by the Chinese tariffs. The actual per acre revenue will differ for each producer based on actual yield, marketing strategies pursued, and many other factors. Very large producers with output sufficient to trigger the $125,000 payment cap will receive lower per acre payments than similar producers not subject to the cap, but their compensation will still more than offset the hypothetical losses from the Chinese tariff.