by Brent Gloy
Direct farm program payments have again become a critical component of net farm income. In 2016 direct farm program payments are forecast to account for $13 billion of the sector’s $68 billion (19%) of net farm income. At $5.9 billion the ARC-CO program is by far the largest category of direct farm program payments.
As we have discussed before, the price guarantees of the ARC-CO program have already begun to decline and this decline will likely accelerate for the 2017 crop year. However, ARC-CO is a revenue based program, so guarantees are also dependent upon county level yield histories. Given that the U.S. has harvested three very large corn and soybean crops in a row, we thought it would be interesting to see how the county level yields have changed over the course of the program. Continue reading
by David Widmar and Brent Gloy
We previously noted that macro-economic and policy issues seem poised to play a larger role in 2017 (and beyond) than in recent memory. This realization has become even more evident in recent weeks as a host of policy issues – both directly and indirectly impacting agriculture – have been discussed. We – Brent and David- are in no way ag policy experts, but the policy issues facing agriculture are significant enough we felt it was important to provide some context. With that said, this week’s post is our 2017 Ag Policy Watch List. Just six months ago is seemed the only issue ag policy gurus were debating was when to start planning for the next Farm Bill. As you will see from our list, ag policy makers will likely spend most of 2017 on issues much bigger than the Farm Bill. Continue reading
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