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FAPRI sees highest farm payments in 2016

Farm program payments for 2016 are expected to be the highest in about 10 years.  Pat Westhoff, director of the (MU) Food and Agricultural Policy Research Institute (FAPRI), says a lot of farmers signed up for Agriculture Risk Coverage for corn, soybeans and wheat. Westhoff tells Brownfield Ag New, “We’ll have a lot of payments under the ARC program this year, it appears. So, that’s a positive thing for farm income, of course, but we expect those payments to drop off in front of us.”

Westhoff says the “ARC” program has moving averages that determine the revenue guarantees each year, “As we move forward in time we’re no longer going to be taking into account the high prices of recent years. We’ll just be taking into account the lower prices we’ve had more recently. And so those guarantees are going to drop off pretty sharply starting in 2017.”

Westhoff says crop insurance will be the single most important part of the farm safety net in coming years if commodity prices stay low. For this year, he says, farm payments will exceed crop insurance payments.