MFP payments covered roughly 85% of USDA's estimated direct farm export losses nationally — but overpaid Midwest row-crop states while leaving California and corn growers undercompensated

Summary

Nationally, USDA's Market Facilitation Program (MFP) paid farmers about $23.0 billion in 2018-2019 ($8.6B + $14.4B), against USDA's own Economic Research Service estimate of $27 billion in direct U.S. agricultural export losses caused by retaliatory tariffs over that same period (mid-2018 through end of 2019). That puts national coverage at roughly 85 percent of the measured direct trade loss — or about 95 percent if the ~$25.7B total of all USDA trade-response spending (MFP plus food purchases and export-promotion funds) is counted, though only the MFP portion went to farmers as income support.

But the national ratio hides an extremely uneven distribution: MFP payments were tied to production of a handful of program commodities (soybeans, corn, wheat, cotton, sorghum, dairy, hogs), so soybean-and-corn-heavy Midwest states such as Iowa, Nebraska, Kansas, and North/South Dakota received payments that exceeded their estimated trade-war losses — a net financial gain — while diversified and specialty-crop states like California, which grow almonds, wine grapes, and other commodities largely excluded from MFP, recovered only a small fraction of their losses. Within commodities, corn growers were also badly undercompensated relative to soybean growers because MFP rates ($1.65/bushel for soybeans vs. roughly $0.01/bushel for corn in 2018) tracked soybeans' outsized loss share rather than each crop's own price decline.

How much USDA paid vs. how much was lost

USDA's Market Facilitation Program (MFP) — the trade-war-specific relief program, separate from regular farm-bill payments — disbursed:

• 2018 MFP: ~$8.6 billion (commodity-rate based; soybeans took roughly 85% of the payout)
• 2019 MFP: ~$14.4 billion (switched to an acreage/county-based rate, paid to about 644,000 operations)
• Total MFP: ~$23.0 billion

USDA also spent smaller amounts on the Food Purchase and Distribution Program and the Agricultural Trade Promotion Program; CRS puts total USDA trade-response spending across all three programs at about $25.7 billion.

Against that, USDA's own Economic Research Service (ERS), in its January 2022 report The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture (ERR-304), estimated direct U.S. agricultural export losses of more than $27 billion from mid-2018 through the end of 2019 due to retaliatory tariffs from China, the EU, Canada, Mexico, Turkey, and India — China alone accounted for $25.7 billion (95%) of that loss. ERS separately reported an annualized loss rate of $13.2 billion/year over the same window. Earlier, real-time USDA Office of the Chief Economist estimates used to size the 2018 MFP program itself were lower, around $11-12 billion — meaning the program was originally calibrated to a smaller loss estimate than what USDA's more careful retrospective analysis later found.

On a strict apples-to-apples basis (farmer income-support dollars vs. USDA's own retrospective loss estimate), MFP covered about 85% of the measured direct export loss nationally ($23.0B / $27.0B). This is a comparison of a specific, narrow proxy (direct export-value loss from tariffs) against a specific, narrow response (MFP payments); it does not capture indirect effects such as domestic price declines from unsold surplus being redirected to lower-value markets, storage costs, or the compounding effect on farm debt and bankruptcies, all of which are real but not counted in either figure.

The coverage ratio hides a large redistribution across states and commodities

An Iowa State University CARD Center general-equilibrium analysis (Balistreri, Zhang & Beghin, 2020) modeled both the tariff-only welfare impact and the tariff+MFP impact state by state. It found that MFP payments didn't just partially close the gap for most farm states — for several major soybean/corn/hog states they overshot it, turning a net loss into a net welfare gain, because MFP payments were funded by broad-based federal revenue while benefits concentrated in a handful of Midwest states:

Separately, a UC Davis analysis found MFP failed to offset roughly $875 million in first-year trade-war losses to California's diversified, high-value specialty-crop agriculture (almonds, wine, dairy, etc.), which is largely outside MFP's covered commodity list.

Within program commodities, compensation was also uneven: the 2018 MFP set soybeans at $1.65/bushel versus corn at about $0.01/bushel, even though corn prices also fell (partly via cross-commodity spillover from the soybean glut) — farmdoc daily's 2019 retrospective found the 2018 payment schedule tracked each commodity's *export* loss share reasonably well but diverged sharply from each commodity's actual *farm revenue* loss, meaning corn growers were notably undercompensated relative to soybean growers.

Put together at the whole-economy level, the Iowa State CARD model's national total actually shows no material reduction in the aggregate estimated welfare loss from adding MFP (-$38.137B tariffs-alone vs. -$38.129B tariffs+MFP) — because MFP, funded through the federal budget, is a domestic transfer of who bears the trade war's cost rather than a reduction in its total size. It shifted the burden away from soybean/corn/hog-belt states and onto states (and, ultimately, taxpayers/future debt) that received little direct MFP money.

Bottom line

At the national, farm-sector level, MFP payments (~$23.0B) covered roughly 85% of USDA's own retrospective estimate of direct agricultural export losses from the trade war (~$27.0B, ERS ERR-304); counting all trade-related USDA spending (~$25.7B) narrows that to about 95%. But "how much of what farmers lost was covered" varies enormously depending on which farmer: major soybean/corn/hog-producing Midwest states were fully compensated or came out ahead, while diversified and specialty-crop states like California — and, within program commodities, corn growers relative to soybean growers — were significantly undercompensated. No figure here captures indirect losses (surplus-driven price declines, storage costs, farm debt effects), so even the 85% national figure understates the true shortfall for many operations.

Every query behind this report

1 warehouse call ran in this session, in order. Each is reproducible against the same snapshot.

SELECT "year", category, subcategory, amount, unit_desc FROM ag.ers_farm_income WHERE state='US' AND "year" BETWEEN 2015 AND 2020 AND (category ILIKE '%government%' OR subcategory ILIKE '%government%' OR category ILIKE '%net farm income%') ORDER BY "year", category