As the market moves up and down in anxious anticipation of the summer growing season, agricultural economists are looking ahead to this fall and what farmers can expect in terms of farm bill payments.
Unfortunately for growers worried about cash flow, the 2015 ARC-County payments that are released this fall are likely to be lower than the checks they received last year for the 2014 crop year.
According to the authors of a recent farmdoc Daily article, “farmers and landowners should not expect the same level of ARC-CO payments for the 2016 production year, which will be received in the fall of 2017, unless prices go to lower levels than are currently being experienced.”
So what might those payments be? As is the case with the ARC-County program that was elected by the overwhelming majority of Midwest corn and soybean producers, the payment amounts will vary by county.
(While agricultural economists have warned from the start that the structure of this farm bill program would result in big differences in payments from county to county, the disparity of those payments has been attracting some negative attention lately from legislators.)
In Northern Illinois, for example, farmers might receive $70 to $80 per base acre of corn, according to farmdoc Daily researchers, while growers in Southern Illinois might see $50 to $60 per base acre of corn. A handful of high-yielding counties in the state—Monroe, Piatt, and Pope—may not receive any farm bill payments at all, given their strong corn production.
Soybean producers are expected to receive lower payments of $50 to $60 per base acre of soybeans, with 21 counties estimated to receive no ARC-County money at all due to strong yields in 2015.
Researchers at farmdoc Daily say smaller and smaller farm bill are likely to be the norm for the coming years, based on the way the ARC-County program was established in the 2014 farm bill.
“Even lower payments should be expected for the 2017 and 2018 production years,” they wrote. “ARC-CO design causes its support to decline over time if low prices continue indefinitely. As a result, ARC-CO provides a bridge for making adjustments and lowering costs. ARC-CO will not provide continuing support year-after-year.”
Wondering how large--or small--your ARC-County payment might be? Click here to check out farmdoc Daily's spreadsheet.
2015 ARC Payments Lower in Most Counties