Coming Aid to Farmers Seen as Partial Payment Amid Uncertain Trade, Price Outlook
Bridge aid possibly under $10 billion seen as first tranche payment; details still being mulled
The Trump administration is still undecided on key details of a coming farmer aid package, including the total funding level, how it will be determined, who will be eligible and when it will be announced, according to Trump administration and congressional contacts familiar with ongoing discussions.
Timeline. USDA Secretary Brooke Rollins told Bloomberg the coming package would be unveiled in early December. Officials had signaled that new assistance was coming, but the rollout was postponed during the federal shutdown. With government operations now fully funded, development of the plan has resumed, but sources say some parameters of the plan have changed.
Rollins said the agency has spent the past several weeks reassessing market conditions and revising its approach. She noted that circumstances have shifted since discussions first began. Soybeans recently hit 17-month highs, and corn and wheat prices have rallied in part based on what some people term “hype” regarding Chinese purchases of U.S. soybeans.
| Soybean futures have strengthened over the past three months while corn and cotton have posted moderate declines, according to a comparison of front-month and continuous contract values across major exchanges. The analysis highlights diverging market fundamentals across U.S. agricultural commodities heading into late 2025 — and underscores the difficulty of tracking sorghum, which lacks a liquid standalone futures contract. Recent soybean futures are trading about $11.57/bu., up from $10.40–$10.50 three months ago, implying an increase of about 10%. Corn futures, by contrast, have softened. Current levels near $4.34–$4.36 compare with $4.65–$4.70 several months earlier, a decline of roughly 7%, based on market data. The pullback reflects ample supplies. Cotton #2 futures are also lower. ICE and continuous contract data show prices now in the 62.50–64.70¢/lb range, down from 66.20–68.50¢/lb three months ago — a drop of about 5%. Weaker global textile demand and large foreign stocks continue to weigh on the market. Sorghum does not have a widely traded U.S. futures contract, making direct comparisons impossible. Tim Lust, CEO of the National Sorghum Producers, says “While prices are different across different areas, we are seeing averages in the country around $3.25-$3.50 supported by FSA Posted County Price data and data we see reported by growers. This does not match with the $3.80 November WASDE that was reported recently. This is a significant difference. We have many elevators that the farmer bid is -$1.00 per bushel off the futures.” Lust detailed that over the last three months, sorghum prices have declined: June sorghum price – $4.14July price – $3.86August price – $3.66 Feed demand softness and export uncertainty keep pressure on local bids, with China buying fewer U.S. sorghum cargoes than in previous cycles. These figures reflect futures contract values, not cash elevator bids, and may differ from local merchandising markets. Because futures contracts roll and differ by delivery month, continuous prices do not always map cleanly to a single crop period. Three-month-ago benchmarks are approximate due to limitations in publicly accessible historical settlement data. U.S. cotton prices have fallen into the low 60-cent per lb area, versus the 90-cent area when China was a good customer. Overall, soybeans have been the relative outperformer in recent months, while grains and softs continue to face headwinds from strong supply and uneven global demand. |
Rollins did not disclose the size or structure of the planned assistance, but sources signal it will likely be under $10 billion and could be cast as an initial tranche, with another funding announcement possible in the spring when more trade and commodity price information is available.
Recall that White Houses officials and USDA Secretary Rollins initially signaled $12-$13 billion in farmer aid. The announcement was anticipated after the government shutdown ended. It was believed that producers of all crops hurting would get help. One ag industry contact said, “USDA should do all it can do because there is lots of stress in farm country, if not panic. USDA should make sure farmers are happy with how they do the aid program. That’s the key. Don’t whiff.”
CCC funding stretched? What few people do not know is that even though Congress reimbursed USDA’s Commodity Credit Corporation (CCC) back to its $30 billion borrowing authority, the One Big Beautiful Bill (OB3) Act will stretch CCC funding ahead as some big 2025 crop farm program payments are expected in the fall of 2026 (farmdoc estimates below).
If FSA sends a payment check, it almost always comes from the CCC.
The CCC finances:
• ARC/PLC
• DMC
• MAL/LDP
• CRP
• LIP/LFP/ELAP/TAP
• ECP
• ERP / WHIP / QLA / special disaster aid
• Pandemic & trade-war payments (historically MFP, CFAP)
• Export credit & food-aid purchases
If funding were no problem and Congress becomes involved, a total aid level needed is $40 billion or more. That will not likely be the result of an eventual combined Trump administration/congressional aid package, but it shows the significant cash flow and debt payment needs of the U.S. ag sector among many producers.
Farmers, many who strongly backed Donald Trump in previous elections, have faced severe financial pressure as overseas demand for U.S. crops has weakened for many commodities and a revised farmer safety net will not come into play until the fall of 2026. Meanwhile President Trump’s sweeping trade disputes have further strained producers, particularly after China initially halted U.S. soybean purchases in retaliation to Trump tariffs placed on Beijing.
A temporary trade cease-fire between Trump and Chinese President Xi Jinping has led Beijing to resume buying American soybeans, with more purchases expected. China has secured at least 20 cargoes of U.S. soybeans, pushing seasonal purchases above 2 million tons.
Despite the improvement in soybean shipments, Rollins said federal relief remains warranted, especially for crop producers who have endured years of tight margins. Many farmers now have significant debt repayments ahead.
Rollins said the administration intends to provide some measure of financial help as farmers prepare next year’s planting decisions, even if the program cannot fully offset recent losses.
An ongoing debate within the administration is what to label the aid: trade mitigation focusing on China’s prior boycott, or an overall farmer aid package as a bridge to help farmers into 2026 planting and other needs, perhaps based on a modified Emergency Commodity Assistance Program (ECAP) aid program Congress approved Dec. 21, 2024 (link), which Congress funded at $10 billion. A separate around $20 billion ag disaster aid program was also approved.
U.S. farmers have been saddled this year with record harvests and lost billions of dollars in soybean sales to China when the nation turned to South American suppliers this fall during stalled trade talks. China also turned away from U.S. sorghum, cotton and beef and pork after being a good customer for years.
“There’s no doubt that the farm economy for a lot of reasons is really, really struggling right now,” Rollins said on NewsNation on Wednesday, adding that resumed soybean purchases from China and other agricultural trade deals have improved conditions. “We’ll soon be announcing a potential bridge payment for those who are still facing losses,” Rollins said.
USDA Deputy Secretary Stephen Vaden told reporters in a call on Monday that the agency is in the process of calculating how recent trade deals with countries including Pakistan and Japan could affect the farmer payments.
During Trump’s first term, he paid farmers about $28 billion over two years via the first trade war with China ($12 billion and then $16 billion).
