Farm Aid Package in the Works for Farmers

The Trump administration is looking at providing a $10 billion aid package from taxpayers to help farmers who are suffering from low commodity prices, higher costs, and the lack of oversea trade partners, particularly China.

President Donald Trump’s ongoing trade dispute with China has eliminated the market for American soybeans as that country has instead found purchase alternatives in countries like Brazil and Argentina. The loss of China has so far been devastating for American producers since more than half of American bean exports had gone there in the past.

Trump has discussed the idea of using some of the federal revenue tariffs have brought in, costs that have fallen on American consumers and companies.

Trade War Impact on American Soybean Farmers 

“We’re in a hell of a mess here,” Ohio farmer Chris Gibbs told Ohio Capital Journal. 

Gibbs farms more than 500 acres of soybeans, corn, wheat, and alfalfa hay and has a 90-head cow-calf operation.

He just began harvest and described his financial situation because of his low returns on the crops and lack of beneficial new trade agreements under the administration. “A severe cash flow mess…a working capital mess.”

Fertilizer, lumber, steel, and aluminum costs have all gone up for farmers as import prices climbed.

RELATED: The lumber business in the United States has been going through a transition, according to this veteran executive’s conversation with American Farmland Owner in January.

Farm Aid Announcement Coming Tuesday, U.S. Treasury Secretary Says

The Trump administration has blamed its failure to improve the situation for soybean farmers to restore trade with China on its adversary.

“It's unfortunate that Chinese leadership has decided to use American soybean farmers as a hostage or pawn in the trade negotiations," U.S. Treasury Secretary Scott Bessent told CNBC.

Bessent said that news will come next week, presumably about an aid package. “You should expect some news on Tuesday on substantial support for our farmers, especially the soybean farmers,” Bessent said. “They have had President Trump's back, and we have their back.”

Aid Package Could Reach $14 Billion

The Wall Street Journal reported that the bailout for American farmers could range from $10 to 14 billion. Farmers like Chris Swanson, who has 7,000 acres in Northwest Iowa believe the aid could go to bills immediately.  

He only expects $9.50 a bushel for his beans as harvest could reach a record nationwide.  “It’s piss poor prices, but not a bad yield,” Swanson said.

Last year’s soybean crop in the U.S. was also bountiful, a testament to the production prowess of domestic farmers like Swanson. But that limited profits. He said that last year’s $10 billion in aid from the Biden administration helped his fellow farmers with some of the economic losses.

He knows that they can’t keep temporarily reducing expenses on fertilizer and equipment purchases.

One unknown with any possible federal bailout is the partial federal government shutdown. Furloughed workers aren’t on the job, which could delay any implementation of aid payments to producers.

RELATED: This longtime ag analyst expects more U.S. farmland to hit the market in the months ahead.