1. Policy Update Joe L. Outlaw Regents Professor & Extension Economist
Co-Director, AFPC
Southern Extension Committee Meetings
September 25, 2017

2. Presentation Outline
Do We Have More or Less Money Than Previous Farm Bills?
What Does the June 2017 CBO Baseline Look Like?
Where Are We in the Process?
Conclusions
Farm Policy

3. Congressional Research Service, Actual Farm Bill Spending and Cost Estimates, October 7, 2010

4. Congressional Research Service, Actual Farm Bill Spending and Cost Estimates, October 7, 2010

5. CBO Estimated Outlays, Million Dollars
Title
2014 Farm Bill Score
June 2017 CBO Score
Commodities
44,458
58,720
Conservation
57,600
59,804
Trade
3,574
3,056
Nutrition
756,433
679,181
Credit
-2,240
-5,398
Rural Development
241 65
Research, Extension, and Related Matters
1,256
879
Forestry 13 10
Energy
1,122
751
Horticulture
1,755
1,812
Crop Insurance
89,827
77,419
Miscellaneous
2,363
2,199
Total Outlays
956,401
878,498

6. June 2017 CBO Baseline by Title Mandatory Spending Only
Million $

7. Corn Price Projections from CBO, FAPRI and USDA

8. CBO Prices Used in Baseline
The CBO price forecast would yield these Benchmark Prices
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
5.29
4.79
3.95
3.70
3.71
3.79
3.85
3.88
With Average Yields, MYA Price Would Have to Be Below These Levels to Trigger a Payment
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
4.55
4.12
3.40
3.18
3.19
3.26
3.31
3.33

9. Soybean Price Projections from CBO, FAPRI and USDA

10. Wheat Price Projections from CBO, FAPRI and USDA

11. All Rice Price Projections from CBO, FAPRI and USDA

12. Upland Cotton Price Projections from CBO, FAPRI and USDA

13. Peanut Price Projections from CBO and FAPRI

14. Actual and Projected ARC and PLC Payments
Source: FAPRI January 2017 Baseline

15. Projected ARC and PLC Payments by Crop
Source: FAPRI January 2017 Baseline

16. Where Are We in the Process?
Almost all commodity groups testified they want both ARC and PLC
Many want an increase in reference prices
Fix county yields used in ARC
House and Senate have yet to release their bills

17. Probability of Triggering PLC Payment at Different Reference Prices
Or said another way, out of the 500 price draws for a year… what percent would trigger a payment

18. Back of the Envelope Calculations of Wheat PLC Payments at Different Reference Prices

19. What I am Worrying About
What Are You Willing to Give up for Your Higher Reference Price?
Payment Timing
Are There Any Changes to Crop Insurance You Want? Or any Changes You Can’t Live With?

20. Thanks!!!
Joe Outlaw