Monday Feb 19th, 20242610 ViewsLine on Agriculture
Direct government payments to farmers will be cut back this year, according to USDA chief economist, Seth Meyer.
“Direct government payments will contract again in 2024. And that gives you an overall kind of direct government payment intervention total there. Below the long-run average,
USDA says payments are expected to decline by $2 billion, or 16% less than last year to a little over $10 billion in payments this year.”
One reason is due to the ARC and PLC payment program.
“Government payments which are a function of commodity prices have a bit of a lag in them relative to those commodity prices. For instance, the payments that the farmers will get in 2024 for ARC and PLC in October of 2024 are related to prices in 2023. So there's a lag so prices were high then there won't be much direct government payments associated with ARC and PLC.”
Another reason for less direct payments to farmers this year is that USDA is projecting lower supplemental payments as well as lower ad hoc disaster assistance. For reference, Meyer says that direct payments to farmers in 2020 totaled 45 and a half billion dollars in 2022. They were at 15 and a half billion dollars. And last year, Direct Payments totaled $12 billion.
