Multibillion-dollar Corn and Soy Payments Possible Due to Coronavirus

By Carl Zulauf

Low market prices on this year’s corn and soybean crops due to the coronavirus could trigger up to $7.2 billion in USDA subsidies to corn and soybean growers, said five university economists on Wednesday. “In estimating the damage that U.S. crop agriculture has suffered, it is important to take into account the payments made by existing farm safety net programs,” wrote the economists on the farmdoc Daily blog.

Traditional farm subsidies have been overshadowed by the Trump administration’s use of stopgap payments totaling $23 billion to farmers and ranchers to mitigate the impact of the trade war on 2018 and 2019 production. The $2 trillion coronavirus relief package included money for agriculture. Agriculture Secretary Sonny Perdue said producers would get $16 billion in cash through one-time programs. Unofficial reports say row-crop farmers would get $3.9 billion.

“Deepening concern exists over the demand destruction caused by the Covid-19 pandemic,” said the economists, so they compared corn and soybean futures prices before and after the coronavirus became widespread. The crops would have generated some $101 billion in revenue before the coronavirus. At present, the two most widely grown U.S. crops would fetch $83 billion to $88 billion.