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Ag bankers discuss new commodity programs

With harvest coming to a close, farmers and their bankers will turn their attention to the new commodity programs in the 2014 Farm Bill.

Mike Hein, an ag banker from Durant, Iowa says there’s a lot to work through.

“The thing that does make it a little bit difficult is there are quite a few variables in there, between using the county averages and using individual averages, and the adjustments that may be taking place with the base acres and the established yields that are on the farms,” Hein says. “So there’s a lot of pieces to this puzzle that have to be identified.”

Farm banker Joe Kessie of Warsaw, Indiana believes most producers will wait until the end of the sign-up period to make their final decision.

“Because one thing is, for the ARC, how that’s going to affect 2014 income won’t be determined until about February,” Kessie says. “So I think a lot of them are probably going to wait until February or March to make their decision whether they go with the ARC or PLC.”

Kessie thinks most producers will go with the ARC program—unless they’re very pessimistic.

“When I’m talking pessimistic, I’m talking two dollar corn and seven dollar soybeans—then the PLC would definitely be a lot better protection.”

The new commodity programs were one of the topics discussed at this week’s ag bankers conference in Omaha.