Is US Farm Support About The November Election?

U.S. President Donald Trump may be pegging his success in November on subsidies for farmers meant to balance the lackluster commitment to early U.S.-Chinese trade deals and higher marketing costs.

The U.S. Department of Agriculture announced plans in September to provide relief for sectors ranging from tobacco to row crops and wool. The payments, the department said, “will provide eligible producers with financial assistance that gives them the ability to absorb some of the increased marketing costs associated with the COVID-19 outbreak.”

Farm-belt states were counted in Trump’s column during the 2016 race, helping to turn key battleground states such as Michigan red in his favor in the Electoral College. The latest polling data from FiveThirtyEight finds many of those states may be turning blue. It’s neck-and-neck in Ohio, though Trump has an edge over former Vice President Joe Biden in Iowa. Michigan, meanwhile, is looking to be moving into Biden’s column.

In April, when commodity prices fell through the floor due to the demand destruction from the pandemic, the Environmental Working Group, which advocates for a healthier future for everything from farms to fracking, said federal stimulus wasn’t enough to support farmers. In comments published by the Reuters news service, however, the group said it was worried the latest package was more about keeping the farm belt in Trump’s column. The program, it said, amounted to good “old-fashioned vote buying.”

The U.S. agricultural sector was bruised by the Sino-American trade deal. Though increasing its purchase of corn and soybeans during the second half of the year, China is still well below the $36.5 billion obligated in the so-called Phase 1 trade deal.

Trends in commodity prices, however, could support the sentiment from the Environmental Working Group. Prices for crops such as soybeans and wheat have seen steady gains, while corn prices are near a one-year high. A gauge of sentiment among agricultural producers from Purdue University and the CME Group found optimism in September was at its highest level since the pandemic began in late 2019, thanks in part to the federal support.

Including the $14 billion outlined in the September package, total payments to U.S. farmers this year came in at a record $51.2 billion.