The Trump administration is considering payments of $2 per bushel for soybeans, 63 cents per bushel for wheat and 4 cents per bushel for corn as part of a package of up to $20 billion to offset U.S. farmers' losses from the trade war with China, Bloomberg reported on Tuesday.
Caitlin Eannello, spokeswoman for the National Association of Wheat Growers, said that 63 cents per bushel for wheat is the number the organization has been hearing for the next round of U.S. trade aid. "That is the number that we've been hearing, she told Reuters.
Those payments would exceed the rates paid last year to farmers in a similar aid package.
President Donald Trump earlier this month directed the Department of Agriculture to work on a new aid plan for farmers as Washington and Beijing intensified their 10-month-old trade war by raising tariffs on each other's goods.
Agriculture Secretary Sonny Perdue last week said the new aid package was likely to be $15 billion to $20 billion, exceeding the up to $12 billion in aid rolled out last year to farmers. Most of it was likely to be direct payments, sources told Reuters.
A spokeswoman for the Department of Agriculture said the details of the aid package would be released soon, without commenting on the reported payment rates. One lobbyist source said the plan was likely to be announced this week.
The USDA spokeswoman added that the aid was designed to avoid skewing planting decisions. "Farmers should continue to make their planting and production decisions with the current market signals in mind, rather than some expectation of what a trade mitigation program might or might not look like," she said in emailed comments to Reuters.
However, the aid was seen encouraging more soy planting at a time when supplies are already at record-high levels.
"That [proposed $2 bean payout] is a pretty enticing carrot, and that tells me that they [farmers] are going to try to get as many bean acres in as possible, at the expense of corn," said Matt Connelly, analyst at the Hightower Report in Chicago.
"The reason is beans [futures] went south is, they saw that $2 a bushel, and that will entice them to plant beans until the July 4th weekend."
Chicago Board of Trade soybean futures turned lower on the report on worries that farmers would plant more of the crop. Top importer China continues to shun U.S. soybeans.
The administration last year paid $1.65 per bushel for soybeans, 14 cents per bushel for wheat and 1 cent per bushel for corn.
Negotiations between the United States and China have soured dramatically since early May, when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.
The dispute between the world's two largest economies has cost billions, roiled global supply chains and rattled financial markets. American farmers, who helped carry Trump to his surprise 2016 election win, have been among the hardest hit.
Bloomberg, citing anonymous sources, said growers of other commodities were also to receive payments in this year’s aid package, but it did not provide rates. It said the plan could change as Trump could make adjustments.
The Trump administration wants any trade deal with China to include purchases of more than $1.2 trillion worth of American products, including agricultural commodities and industrial goods.