Edging Closer to the ARC-CO Payment Cliff

soybean-sunset-3

By Brent Gloy

The 2016 USDA farm income forecast shows that USDA expects direct government program payments to increase by roughly $2 billion over 2015 levels, reaching a total of $12.8 billion.  The increase was driven primarily by increases in payments under the ARC and PLC programs.  From 2015 to 2016 the forecast is for PLC program payments to increase from $754 million in to $1.96 billion (160% increase) and payments under ARC programs to increase from $4.38 billion to $5.94 billion (35% increase). Continue reading

How Did Your County Do? Changes in ARC-CO Revenue Guarantees

By Brent Gloy

ARC-CO Revenue

In our last post we discussed how the Olympic averaging process will almost certainly result in lower price guarantees for corn and soybeans in 2016.  In this post we take a look at the county level yield and revenue guarantees. Continue reading

Approaching the ARC-CO Payment Cliff?

ARC-CO Payment Cliff

by Brent Gloy

At the end of October the USDA provided a Halloween treat by making ARC-CO payments for several 2014 crops. In fact, USDA reported that 800,000 farms received ARC-CO payments.  The 2014 ARC-CO payments totaled $3.9 billion with the vast majority ($3.3 billion) paid on corn base. This wasn’t surprising as the ARC-CO program was very popular with corn and soybean farmers, with over 90% of farms and base acres enrolled in the program.

As we discussed in an earlier post, government support has played a key role in moderating the impact of farm income downturns. However, the payments provided under this farm bill will almost certainly be less than that in previous periods of low income. Further, given the structure of the ARC-CO program it is quite likely that program payments for corn will begin to fall after the 2015 payments. Continue reading