MEMPHIS, Tenn. – The National Cotton Council extended its thanks to the Administration after USDA announced details regarding the second tranche of Market Facilitation Program (MFP) payments for the 2019 crop year.
NCC Chairman Mike Tate, an Alabama cotton producer, said this assistance is timely as U.S. cotton’s economic health has deteriorated significantly during 2019. He noted that lost market share to China and a slowdown in global cotton demand have contributed to cotton futures prices having fallen by approximately 30 cents per pound since summer 2018. With average yields, that drop equates to about $250 less revenue per acre.
“This second round of MFP payments is much needed for mitigating the impacts of retaliatory tariffs being placed on U.S. raw cotton to China,” Tate said. “We are encouraged from Administration reports about the state of the trade talks with China in an effort to finalize a Phase 1 agreement that would include a significant commitment by China to purchase U.S. agricultural commodities.”
The first tranche of MFP payments provided 50 percent of the expected county payment rate per acre and the second tranche – to begin being processed by USDA during the week of November 18 – is providing an additional 25 percent of the county payment rate.
Tate said the U.S. cotton industry is urging USDA to proceed with facilitating the third MFP tranche, which the agency has indicated will be 25 percent of the 2019 MFP. USDA indicated a January timetable for that tranche, but its initiation could be affected by a potential Phase 1 agreement with China.