US may pay $2 per bushel for soybeans to help farmers

WASHINGTON: The Trump administration is considering payments of $2 per bushel for soybeans, 63 cents per bushel for wheat and 4 cents per bushel for corn as part of a package of up to $20 billion to offset US farmers' losses from the trade war with China, Bloomberg reported on Tuesday.

Those payments would exceed the rates paid last year to farmers in a similar aid package.

President Donald Trump earlier this month directed the Department of Agriculture to work on a new aid plan for farmers, as Washington and Beijing intensified their 10-month-old trade war by raising tariffs on each other's goods.

Negotiations between the United States and China have soured dramatically since early May, when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.

The dispute between the world's two largest economies has cost billions, roiled global supply chains and rattled financial markets. American farmers, who helped carry Trump to his surprise 2016 election win, have been among the hardest hit.

Agriculture Secretary Sonny Perdue last week said the new aid package was likely to be $15 billion to $20 billion, exceeding the up to $12 billion in aid rolled out last year to farmers. Most of it was likely to be direct payments, sources told Reuters.

The administration last year paid $1.65 per bushel for soybeans, 14 cents per bushel for wheat and 1 cent per bushel for corn.

Chicago Board of Trade soybean futures turned lower on the report on worries that farmers would plant more of the crop, adding to already-record-large stockpiles. Top importer China continues to shun US soybeans.

Bloomberg, citing anonymous sources, said other commodities were also to receive payments in this year's aid package, but it did not provide rates. It said the plan could change as Trump could make adjustments.

One lobbyist source said the plan was likely to be announced this week. A USDA spokeswoman said details of the package of support for farmers was going to be released at a later date.

The Trump administration wants any trade deal with China to include purchases of more than $1.2 trillion worth of American products, including agricultural commodities and industrial goods.