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Federal farm payments are high, but not a record

Agriculture economist David Widmar says the latest Market Facilitation Program outlay results in direct farm payments being higher than in recent memory, but not at record levels. Widmar, the co-founder of Ag Economic Insights, tells Brownfield MFP 2.0 payments bring early estimates for 2019 federal farm payments to about $21 billion.

“If we were to go back to the late 90s, early 2000s, or the farm financial crisis of the 1980s, we were much higher; more than $30 billion in 2019 terms,” Widmar told Brownfield Ag News Thursday.

When MFP 2.0 payments are added to payments left over from MFP 1.0, conservation payments, and ARC and PLC payments, Widmar says they will total 27 percent of 2019 net farm income. That’s up from federal farm payments totaling 10 percent of net farm income during the farm economy boom that peaked in 2013. Even that, however, is not a record, according to Widmar.

“At the worst of the farm financial crisis we were anywhere from 40 to 60 percent direct payment share of net farm income,” said Widmar, “so again, much higher than in recent memory, but we’ve seen much more dire situations in the past.”

Widmar says the trade war, on top of four years of the soft farm economy, has resulted very low farm income. “2018 has now been the lowest year in net farm income that we’ve seen since 2002, and if you remove those MFP payments that we got in 2018, you’d actually fall below 2002 levels,” said Widmar. “And so [without MFP payments, 2018 net farm income] would be the lowest level since the 1980s.”