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