Market Facilitation Program: Impacts and Initial Analysis

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This is the title of an article authored by agricultural economists from the University of Illinois and the Ohio State University. The Market Facilitation Program (MFP) is an effort by the USDA to provide aid to farmers because of trade disputes with our major foreign grain buyers. It has been estimated that the escalating trade issues in the May to August 2018 period have led to an 11 percent ($1.10) decline in soybean prices and a 5 percent decline ($0.20) in corn prices (farmdoc Daily, Aug. 16, 2018).

The payment rates for the two major crops, here in central Illinois, will be $0.01 per bushel of corn and $1.65 per bushel of soybeans. The initial payments will be make on 50 percent of the reported 2018 production. The effective payment on proven 2018 production is $0.005 per bushel of corn and $0.825 per bushel of soybean. There is a possibility of further MFP payments, but it is not guaranteed.

Using these numbers, the economists are estimating initial MFP payments of about $1 per acre for 200 bushels per acre corn and $53 per acre on 64 bushels per acre soybean. As the article points out, if a farm is 50:50 corn and soybean, then the average per acre payment will be $27 for this initial payment.

The application process for MFP began on September 4. However, the USDA suggests that farmers have "verifiable and relative production record by crop, type, practice, intended use, and acres if not already on file". The application process ends on January 15, 2019. More information on MFP is available at: .

To access this article, visit farmdoc Daily at: and click on "Market Facilitation Program: Impacts and Initial Analysis"; Schnitkey, G., J. Coppess, N. Paulson, K. Swanson and C. Zulauf.