By Brent Gloy
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
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
By Brent Gloy and David Widmar
As we discussed last week, U.S. farm income has declined dramatically over the last two years. The magnitude of the drop has been substantial. In real (2009) dollars, the fall from 2013 to 2014 and 2014 to 2015 are the largest absolute declines since 1979 to 1980. In percentage terms, the 2014 to 2015 decline is the largest since 1982-1983.
We thought it would be worthwhile to examine the decline in further detail. As we mentioned last week, persistently high and increasing expenses have played a key role in the decline. We will look at how expenses have changed throughout previous downturns in a later post. For this week’s post we wanted to look at something that hasn’t gone up in this downturn, direct government program payments. Continue reading