Ag News
USDA explains trade damage math, will buy surplus poultry
Posted on Aug 27, 2019 at 20:00 PM
On Aug. 23, the USDA published a detailed accoun of how it created the support package formulas for farmers announced July 25. The USDA’s Office of the Chief Economist developed an estimate of gross trade damage for commodities with assessed retaliatory tariffs by China, India, the European Union, and Turkey to set commodity payment rates under the Market Facilitation Program (MFP) and purchase levels under the Food Purchase and Distribution Program (FPDP).
The USDA said it took the same approach often used in adjudicating World Trade Organization trade dispute cases.
The MFP will pay producers of specified commodities between $15 and $150 per acre. Under FPDP, the USDA’s Agricultural Marketing Service (AMS) will buy up to $1.4 billion worth of surplus commodities that will then be distributed to food banks, schools and other outlets serving low-income individuals.
Included in that estimated purchase amount is $432 million worth of surplus poultry. While chicken broilers are Georgia’s largest agricultural commodity, it is not clear how much Georgia-produced chicken will be purchased through the FPDP.
The AMS will buy affected products in four phases starting after Oct. 1, with deliveries beginning in January 2020. The products purchased can be adjusted between phases to accommodate changes due to: growing conditions; product availability; market conditions; trade negotiation status; and program capacity.
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