The U.S. has agreed on a $2 trillion stimulus package, the largest economic stimulus in its history, in response to the economic impacts of Covid-19. U.S. farm groups lobbied hard to be included in the package, and $23.5 billion was included in the final package for farm aid. This farm aid comes on top of the two trade aid packages of $12 billion and $16 billion introduced by the Trump Administration in 2018 and 2019, respectively, to provide relief to commodity producers hurt by the retaliatory tariffs introduced by various countries in response to tariffs on their exports to the U.S. introduced by President Trump.
Assuming no change in market prices and other farm income in 2020 compared to the February 2020 USDA farm income forecast, if all of this emergency aid were paid out in 2020, then 40% of U.S. farm income in 2020 will derive from government payments. While not all of the emergency aid may be paid out in calendar year 2020, it is also likely that counter-cyclical payments will increase and other farm income will also fall compared to the February 2020 forecast in response to falling export and home demand.… Read the rest