The forecasts for a bountiful U.S. corn crop and increased corn stocks could potentially trigger subsidy payments for farmers this year. Pat Westhoff, with the Food and Agricultural Policy Research Institute (FAPRI-MU), says prices might trigger payments under the two programs in the new Farm Bill. Westhoff tells Brownfield Ag News, “If we were to get corn prices below $3.70 a bushel on a season average basis producers who signed up for the new Price Loss Coverage (PLC) program would be qualified for payments. Even if prices are higher than that, people who sign up for the Agricultural Risk Coverage (ARC) program might be getting payments on this year’s crop.”
At this moment, though, he says payments for some southern crops appear most likely. He tells Brownfield, “I think right now, taking a snapshot of today, peanuts and rice appear to be two commodities where it’s very likely that prices will fall below the reference prices in the new Farm Bill. It could happen for corn and other crops as well but it’ll depend on the final size of the crop and what ultimate demand for that crop proves to be.”
Westhoff says it’s been awhile since corn prices have been this low, “It’s been several years since we’ve seen these kind of prices. Two-thousand-10 was the last time futures prices were this low. And, we have the potential of having a season-average price that could be the lowest since the 2008 boom.” A lot, of course, depends on the weather moving forward.