Market Prices Could Trigger Up To $7.2B in Subsidies to U.S. Corn and Soybean Growers
Plunging market prices for this year’s corn and soybean crops could trigger subsidies up to $7.2 billion to U.S. growers.
Attention has been focused on the current administration’s bail-out payments totaling $23 billion to farmers and ranchers that were approved to mitigate the fallout related to the ongoing trade war with China affecting 2018 and 2019 production. Of the $2 trillion relief package associated with COVID-19, Sonny Perdue has said that farmers would receive $16 billion through one-time payments, however, unofficial reports have estimated payments to farmers at $3.9 billion.
However, demand destruction caused by the pandemic is a growing concern, and examining futures prices for corn and soybeans both before and after the spread of coronavirus, economists tentatively believe subsidies could range between $3.9 billion and $7.2 billion, depending on the correlation between futures prices in May to cash prices when farmers sell their crops.