Planning on a Big ARC-County Payment? Better Wait for the County Yields

It’s that time of year when farmers are putting together their crop budgets and operating credit requests for the next crop year. One big unknown for many farmers relates to the size of potential government program payments. Earlier it appeared as if the new ARC-County farm program was set to make some substantial payments to farmers, but farmers and bankers may want to be very conservative about the size of government payments that they place in their budgets. Although crop prices are well below the 5 year Olympic average for both corn and soybeans, it is quite likely that crop yields for many counties will be high this year. How high these yields are set will greatly influence ARC-County payments.

Many farm bill sessions that I have either attended or read about have focused on how the market year average (MYA) price will impact the size of farm program payments for the ARC and PLC program options. When it comes to payments under ARC-County, the level of county yields will also be critical in determining the payments, so we decided that it would be useful to provide some information on how county yields might influence the ARC-County payments. (more…)