Oct 31, 2019

Nearly 40% of 2019 farm income will come from federal aid and insurance

Photo: Joe Raedle/Getty Images

The Agriculture Department projects that farm incomes will reach $88 billion in 2019 but nearly 40% of that — $33 billion — will come from trade aid, disaster assistance, the farm bill and insurance indemnities, according to a new report by the American Farm Bureau Federation (AFBF).

Why it matters: Farmers — a critical constituency for President Trump in the 2020 presidential election — are feeling the squeeze from China’s retaliatory tariffs, extreme weather and record-high farm debt that's driving farm bankruptcies.

By the numbers: In a 12-month period ending in September 2019, Chapter 12 farm or fishery bankruptcies totaled 580 filings, up 24% from a year earlier and the most since 2011, when 676 chapter 12 bankruptcies were filed.

  • Wisconsin experienced the highest Chapter 12 bankruptcy filings at 48 filings, followed by 37 filings in Georgia, Nebraska and Kansas.
  • Iowa, Kansas, Maryland, Minnesota, Nebraska, New Hampshire, South Dakota, Wisconsin and West Virginia reported Chapter 12 bankruptcy filings on par with or above 10-year highs
  • Yes, but: The AFBF noted that the Chapter 12 filings remain well below the historical highs in the 1980s.

The big picture: "The support provided to farmers in 2018 and 2019 is expected to alleviate some of the financial stress, however, not all farmers will benefit from trade assistance, farm bill programs, crop insurance or disaster aid. As a result, it could take some time for the financial relief to manifest in the farm bankruptcy trends," per the AFBF.

Go deeper: Farm aid from Trump’s trade war has cost more than double the 2009 auto bailout

Go deeper

U.S. farmers could really use some help

Illustration: Sarah Grillo/Axios

Investors have been basking in the glow of the "phase one" trade deal between the U.S. and China, but farmers, who are supposed to be the main beneficiaries of the agreement, have reason to be wary, experts say.

What's happening: U.S. farmers have been suffering this year. Chapter 12 bankruptcies have risen 24% over the previous year, and farm debt is projected to hit a record high $416 billion.

Go deeperArrowNov 5, 2019

WSJ: Tariff revenue spiked to a record $7 billion in September

A truck passes by China shipping containers at the Port of Los Angeles. Photo: Mark Ralston/AFP via Getty Images

The U.S. amassed $7 billion in import tariffs in September, a 9% jump from figures in August and a 59% year-over-year increase due to new taxes on consumer goods, figures compiled by the Commerce Department show, per the Wall Street Journal.

Why it matters: President Trump has falsely said China is paying for the tariffs. Business executives and economists generally recognize the revenue as a growing burden on American importers and U.S. customers.

Go deeperArrowNov 6, 2019

Trump administration to offer additional relief to farmers amid trade war

Photo: Ricky Carioti/The Washington Post via Getty Images

The Department of Agriculture will distribute the second round of aid payments for 2019 aimed at buffering the impact of President Trump's trade war with China starting next week, according to a USDA statement.

The state of play: The administration already paid farmers $6.7 billion for production in this year and $8.6 billion last year, per Politico. The earlier payment in 2019 covered half of the farmers' eligible production, and the latest round will cover an additional quarter.

Go deeperArrowNov 16, 2019