How Much Will Farm Bill Pay For 2016 Crop?

Most farmers signed up or are  enrolled in the county yield-based Ag Risk Coverage or ARC-CO option of the current Farm Bill. The payment a farmer might receive is based on county yields and the price. The Farm Bill uses benchmark county yields for a number of years and a weighted price depending on how much corn was sold each month to determine whether you will get payment. It gets very complicated very quickly. Most farmers, myself included, do not even try and figure it out. We do not have to.

That is because there are farm management analysts like Kent Thiesse from Lake Crystal who do it for us. Like I always say, it is not what you know but who you know! Nevertheless, for doing projected cash flows it is good to have an idea of how much of a payment, if any, you might have earned from the Farm Bill. At this stage in the marketing year we have a pretty good idea. There will be no payments for soybeans because of higher prices than last year and pretty good yields.

For corn there will be a lot of variability from county to county. One might have a high payment and the county right next door no payment. This is because of yield differences the past couple of years. Farmers in Blue Earth County will receive a payment of about $64 for each base acre, Faribault $11, Freeborn $45, Rice $48, Waseca $24, Dodge $64, Goodhue $65, Steele $18, Wabasha $55, Washington $28, and Dakota and Le Sueur each are at $0. While the yields are known, the current price projection is $3.40 a bushel. That could change the remainder of the marketing year and affect the payment.

Thank you to Kent Thiesse for digging this information out of the NASS county yield estimates. All the payments will likely be decreased by 6.8 percent because of the federal sequestration reduction. The ARC-CO payments will be made in October of this year, which is the end of the 2016 marketing year.