It appears highly likely that many crop producers in Minnesota and northern Iowa who are enrolled in the county yield-based Ag Risk Coverage (ARC-CO) farm program choice on their corn base acres will earn a significant farm program payment for the 2014 crop year. In addition, farm operators in some counties may also earn an ARC-CO payment on soybean base acres for the 2014 crop year. At current estimated market year average (MYA) prices, it is not likely that producers that enrolled in the Price Loss Coverage (PLC) program will earn a farm program payment for either corn or soybeans for the 2014 crop year. All farm program payments for the 2014 crop year will be paid after Oct. 1, 2015.
As of Aug. 1, the current USDA estimate for the 2014 MYA price for corn is $3.70 per bushel. Based on that MYA price estimate, the projected 2014 ARC-CO payment for corn in most Minnesota and northern Iowa counties would be at the maximum payment level. Estimated maximum ARC-CO payment rates in various counties are from $70.00 to just over $80 per corn base acre in southern Minnesota and northern Iowa, from $60 to $70 per corn base acre in central Minnesota, and slightly less than that amount in northern Minnesota.
As of Aug. 1, the current USDA estimate for the 2014 MYA price for soybeans is $10.05 per bushel. Based on that MYA price estimate, the projected 2014 ARC-CO payment on soybean base acres in Minnesota and northern Iowa would range from 0 to $50 per soybean base acre. Approximately half of the counties would likely get either a partial or maximum payment for 2014, depending on the 2014 average county soybean yield, compared to the 5-year average county yield. As a result, producers in one county may receive a significant 2014 ARC-CO payment on their soybean base acres, while producers in the neighboring county may receive no payment.
Based on the current 2014 MYA price estimates of $3.70 per bushel for corn and $10.05 per bushel for soybeans, there would not be a 2014 PLC farm program payment for either corn or soybeans. If the final corn MYA price on Sept. 30, 2014, drops below $3.70 per bushel, there would be a very small 2014 PLC payment on corn base acres The soybean MYA price needs to be below $8.40 per bushel before any PLC payment would occur on soybean base acres.
I have prepared an information sheet, Estimating 2014 Corn and Soybean ARC-CO Payments, which looks at estimating the likelihood of 2014 ARC-CO payments for corn and soybeans at various 2014 market year average (MYA) price levels, and various county 2014 NASS yield levels, expressed as a “% of BM Yield”. The sheet also includes Charts that list the 2014 benchmark (BM) yield, the 2014 NASS yield, and the % of BM Yield” for most Counties in Minnesota and Northern Iowa. This information sheet helps explain the difference from county to county for estimated 2014 ARC-CO payments on soybean base acres, and could provide some early insight on potential 2015 ARC-CO payments. To receive a free copy of this Information Sheet, contact me at [email protected]
Farm operators need to enroll in the ARC/PLC farm program for 2014 and 2015 at their local Farm Service Agency (FSA) office by Sept. 30, 2015, in order to be eligible for farm program payments for those two years. Failure to enroll in the farm program by Sept. 30 means no 2014 ARC-CO payments, which could cost producers thousands of dollars in lost farm program payments.