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Latest Minnesota yield estimates reinforce low ARC-Co payment forecast

A farm management analyst says record corn and soybean yields in Minnesota last year could lower future farm program payments.

The USDA’s final 2015 corn and soybean yield estimates were released last week and Kent Thiesse with MinnStar Bank in Lake Crystal tells Brownfield the strong crop year has created a pair of negative factors.

“We had higher-than-average yields, and at the same time the benchmark yields (the five year average) for 2015 used 2010 to 2014 for comparing averages, versus 2009 to 2013 a year earlier.”

He says for corn, benchmark yields used to calculate payments in the ARC-County program used by most Minnesota farmers dropped 6 to 12 bushels per acre in many counties from 2014 to 2015.

“Now you’re comparing these high yields we had in 2015 against the lower average to determine those payments.  So even though we’ve got the same lower benchmark prices to work with, there’s a lot of variation (because of yields).”

While Thiesse anticipates variability in corn payments for the 2015 crop year, he says soybean payouts will be few and far between.

“Most counties will get either zero or very little payment because of the high yields.  There are a few counties in southeast and west central Minnesota that will get more significant payments because their benchmark yields are a little higher compared to their actual 2015 yields.”

Thiesse says many producers and ag lenders he’s talked to have been making assumptions that ARC-County payments for 2015 will be similar to 2014, and his advice is to revisit the farm program data using the latest statistics from USDA.

The 2015 NASS Minnesota corn yield estimate is 188 bushels per acre, 11 bushels higher than the previous record set in 2010.

The previous soybean yield record of 45, also set in 2010, was eclipsed by 2015’s 50 bushels per acre.