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Updated: ARC corn payments again top soybeans

Fewer growers may get checks for 2016, according to Farm Futures projections. Includes updated information.

Editor’s Note: This story was updated to reflect an increase in USDA’s average cash price projection for soybeans March 9. It was previously updated with new data that lowered payments around $12 for corn and $2 for soybeans.

Checks for 2016 ARC-county payments won’t be in the mail until October. But fewer growers could be in line for corn and soybean benefits this fall, according to Farm Futures initial projections.

Around 73% of counties could see payments for corn, down from 2015 levels when the rate hit 98%. Average checks could be smaller too. Based on county yields published Thursday by USDA, payments for those qualifying could run around $56 an acre, before sequestrations, if any. Last year’s payments, which are made on 85% of base acres, averaged $63 for those getting a check, but were subject to sequestrations made as part of a budget deal in Washington.

As was the case in the first two years of the program, soybean payments will be less common than corn. Our projections show 28% of counties receiving payments, down from 73% for the 2015 crop program year. This year’s average payment for those getting a check could be around $32, down from $38 received on average last fall for 2015.

Around 80% of counties received corn ARC payments in 2014, with the average check cut for $61. Only 29% of counties received soybean payments in 2014, with the average at $31 for those getting a check.

The interactive maps below show details for counties were we can make an initial projection. USDA’s Farm Service Agency, which manages the ARC program, bases its yields on data collected by the agency’s National Agriculture Statistics Service, or NASS, which doesn’t put out estimates for all counties. FSA uses other methods to estimate yields for counties without NASS data, and those likely won’t be available until the checks are cut in the fall. Plus these initial releases of county data are typically updated later when more data comes in.

Another complicating factor making these estimates preliminary is the yields used by the FSA, which are based on production per acre planted for grain, with adjustment for failed acreage. We made estimates for that based on Risk Management Agency data.

Also unknown is the final average cash prices for the 2016 crops. We’ve plugged the latest estimates from USDA into our model for payments, $3.40 for corn and $9.60 for soybeans.

The ARC-CO program uses five-year Olympic averages to determine yields and cash prices used in payment formulas. These exclude the high and low years over the previous five years. The prices used in 2016 revenue guarantees for both corn and soybeans are lower, one reason payments are smaller. The benchmark price for corn dropped from $5.29 to $4.79, while soybeans fell from $12.27 to $11.87. Benchmark prices for 2017 could be even lower. Four straight years of falling corn prices, and three for soybeans, could bring benchmark prices to $3.92 for corn and $10.90 for soybeans, the lowest so far.

These maps are a first-look work-in-progress. We’ll be updating them as more data comes in. They include breakdowns for counties with irrigated and non-irrigated production, as well as counties with only an “all acres” yield. Click the square in the top left hand corner of the band across the top of the map to show the different layers, clicking them on or off as needed to display they type of yield you’re interested in.

 

USDA/Farm Futures

 

 

 

 

 

TAGS: Soybean Corn
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