1. Associate Professor/Crop Markets Specialist
U.S. Farm Policy
Ames, Iowa
August 12, 2013
Chad Hart
Associate Professor/Crop Markets Specialist 1 1

2. Farm Bill Titles Commodities IX. Energy
Conservation X. Hort. & Organic Ag.
Trade XI. Livestock
Nutrition XII. Crop Insurance
Credit XIII. Commodity Futures
Rural Development XIV. Miscellaneous
Research XV. Trade & Taxes
Forestry

3. Farm Bill Projected Spending
$297 Billion

4. Direct Payment Rates Crop Unit 2008-12 Corn $/bu. 0.28 Soybeans 0.44
Barley
0.24
Wheat
0.52
Oats
0.024
Cotton
$/lb.
0.0667
Sorghum
0.35

5. Countercyclical Payments

6. Loan Rates Crop Unit 2008-09 2010-12 Corn $/bu. 1.95 Soybeans 5.00
Barley
1.85
Wheat
2.75
2.94
Oats
1.33
1.39
Cotton
$/lb.
0.52
Sorghum

7. Ideas on the Next Farm Bill
Let’s look at the common features from the House and Senate bills
Both versions of the farm bill eliminate direct payments, countercyclical payments, ACRE, and SURE
The marketing loan program would continue
Livestock disaster programs would be reestablished

8. Reference Prices Senate: 55% of 5-yr Olympic average MYA price
House: Set by law
Corn $3.70
Wheat $5.50
Soybean $8.40
Corn
$2.95
Wheat
$3.62
Soybean
$6.29

9. ARC or RLC instead of ACRE
Revenue-based support program
Revenues based on 5-year Olympic averages for yields and prices
Yields and prices have cups (T-yields and reference prices)

10. ARC Set-up for Corn in 2013 Yield per Planted Acre Year Farm
(bu./acre)
County
Season-Average Price
($/bu.)
2008
160
4.06
2009
175
3.55
2010
164
5.18
2011
163
6.20
2012
165
5.00
Olympic Average
4.75
So the farm and county yields would be 164 bushels per acre and the ACR price would be $4.75 per bushel.

11. AMP or PLC instead of CCP
Price-based support program
Reference prices establish targets
Works like CCP
Payment rate = Max(0, Reference price – Max(MYA price, Loan rate))

12. Dairy Dairy Producer Margin Protection Program
Voluntary margin coverage, with the opportunity for supplemental coverage
Dairy Market Stabilization Program
Managed supplies when margins fall
Packages are very similar across the House and Senate versions

13. Yield Insurance Payout Graph
No Payout
Payout

14. RPHPE Payout Graph
No Payout
Payout

15. RP Payout Graph No Payment Neither Pay RPHPE Pays YP Pays Both Pay
RP Pays

16. SCO Examples from Last Year’s Bills
Source: Congressional Research Service

17. Thank you for your time. Any questions. My web site: http://www. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: