U.S. farmers finally got some good news this week, lifting their spirits and prices after months of dismal news.
On Tuesday, President Trump announced that he was invoking a Depression-era program to help bail out farmers hurt by the trade disputes with buyers of U.S. agricultural products. The bailout, which could cost up to $12 billion, is expected to be a one-time support, although details of the package won’t be known for months.
Trade disputes with the European Union are calming, with both sides agreeing not to escalate tariffs right now and instead work toward a “zero tariff” trade environment. Additionally, the EU has stated its intention to buy more U.S. beans, a move that could partially replace the loss of Chinese demand.
Finally, wheat prices surged on concerns that harvests from major exporters like the EU, Russia, Ukraine, Australia, and Canada are all expected to shrink this year. This should help U.S. wheat farmers sell more grain abroad, boosting prices.
Despite this week’s optimism, farmers are still worse off now than they were six months ago, primarily due to the trade disputes that are still largely unresolved.