1. APCA Farmer-Owned Reserve Study 2011 NFU Fall Fly-In Washington D.C. September 12, 2011 Daryll E. Ray Agricultural Policy Analysis Center University of Tennessee Institute of Agriculture

2. APCA Policy Description Objectives –Bulk of revenue from market receipts –Reduce government payments while maintaining farm income –Reduce price volatility

3. APCA Policy Description Reserve Specifications for 1998-2010 Study Period –Initial corn loan rate set at midpoint between variable and full cost of production –Indexed with a prices paid by farmers index –Other crop loan rates set to historic ratios with corn –Release price is set at 160% of loan rate

4. APCA Price Band for Corn Price Band for Corn Used in Farmer-Owned Reserve Study Release Price Loan Rate

5. APCA Policy Description Reserve Specifications for 1998-2010 Study Period –Reserve maximums Corn – 3 billion bushels Wheat – 800 million bushels Soybeans – 400 million bushels –Farmer storage payment rate 40¢/bu./yr –Set-aside available if needed –Eliminate Direct Payments, LDPs, & CCPs

6. APCA 8 Crops - Government Payments Historic Baseline Reserve Policies $ Billion

7. APCA 8 Crops – Government Payments 8 Crops – Government Payments Average Per Year Over Each Period Historic Baseline Reserve Polices $ Billion $14.8 $4.8 $6.8 $3.6 $11.7 $4.3

8. APCA Corn Prices Historic Baseline Release Price Loan Rate

9. APCA Corn Prices Historic Baseline Reserve Policies Release Price Loan Rate

10. APCA Corn Prices Corn Prices Average Per Year Over Each Period Historic Baseline Reserve Policies $2.05 $2.68 $4.02 $3.71 $2.81 $3.07

11. APCA Corn Exports - Quantity Historic Baseline FOR Policies Million Bu.

12. APCA Corn Exports - Value Historic Baseline Reserve Policies $ Billion

13. APCA Corn Value of Exports Corn Value of Exports Average Per Year Over Each Period Historic Baseline Reserve Policies $ Billion $3.9 $4.8 $8.3 $7.7 $5.6 $5.9

14. APCA Reserves - Quantity Corn Wheat Million Bu. Soybeans

15. APCA Corn – Value of Production plus Government Payments Corn – Value of Production plus Government Payments Average Per Year Over Each Period Historic Baseline Reserve Policies $ Billion $26.4 $28.2 $51.5 $46.5 $36.1 $35.2

16. APCA Realized Net Farm Income Realized Net Farm Income Average Per Year Over Each Period Historic Baseline Reserve Policies $ Billion $49.8 $50.8 $55.8 $51.5 $52.1 $51.1

17. APCA Summary of Findings Over the Study Period, 1998-2010, with Reserves in Place: –Government payments 60% lower –Increased crop prices and increased reliance on market receipts –Value of exports $4.9 billion higher –Lower price volatility benefitting: Consumers Crop farmers Livestock producers and industrial users

18. Thank You