Members of the Northern Canola Growers Association and the U.S. Canola Growers Association were disappointed when USDA released the Trade Methodology for the different crops what were used in determining the latest Marketing Facilitation Program figures, according to Barry Coleman, the executive director of the Northern Canola Growers Association.
“They increased corn from one penny to 14 cents, wheat went from 14 to 41 cents a bushel, soybean went from $1.65 to $2.05 and canola got a big fat zero,” Coleman said. “When we looked at the data, they showed that a $2.05 impact on soybean directly translates to $3.45 cents a hundredweight (cwt.) for canola, which is what canola should have had. That represents $100 million of missed trade damage imposed on the canola growers by the government that was not reimbursed.”
Coleman continued by saying the canola groups several times over the past year have mentioned this collateral damage canola growers have suffered due to the trade tariffs, but that message was ignored when the final figures were announced.
In a recent news release, Bryon Parman, Extension agricultural finance specialist, explained how the MFP rates were arrived at for 2019.
“This year’s program payments are considerably different than last year in both the weights given to each crop and how payment rates for farmers are calculated,” Parman said.
This year’s payments are in dollars per acre and not based on the current year’s crop production. Additionally, the rates have changed and other crops are included that were not in the 2018 program.
USDA performs four calculation steps to determine the payment rate. The steps include looking at the typical number of acres in a county of the 2019 specified crops, the yield history at the county level and the 2019 payment rates per commodity. These calculations are then averaged across the county such that each acre of the specified crops receive the same payment rate.
Crop acres with no payment rate still receive a payment, Parman noted, however, they lower the county average by having a $0 value.
“Basically that $100 million dollars canola should have been credited with would have been spread out to counties in North Dakota where canola production takes place, which would have resulted in higher rates per acre for those counties,” Coleman explained. “That would have been a big impact for this region’s producers.”
A map of counties in North Dakota listed the MFP rate for each county as a part of Parman’s news release. The highest rate was LaMoure County, which has a large percentage of soybean and corn acres, at $60 per acre, while one of the prime canola growing counties in the state, Cavalier, has a $22 per acre MFP figure. The average when all of the counties were considered is $31 per acre.
Many of the other oilseed crops grown in this region were also give a $0 value, including flax, sunflower, rapeseed and safflower, even though they are oilseed crops much like soybean.
Coleman is expecting a third round of MFP payments in 2020, and the canola groups are already working to convince USDA of the financial harm the growers have experience and try to get things corrected if another round of MFP is needed.