2014 ARC-CO Corn Payments Expected for Nebraska Panhandle

2014 ARC-CO Corn Payments Expected for Nebraska Panhandle

2014 ARC-CO Corn Payments Expected for Nebraska Panhandle

March 6, 2015

Based on 2014 county corn yields released by the U.S. Department of Agriculture and current price projections, it is clear that Nebraska Panhandle base acres enrolled in ARC-CO for corn are likely to receive a commodity program payment for the 2014 crop. 

Payments for ARC-CO are triggered when the average county revenue for a covered commodity is less than the county revenue guarantee for that commodity. The county revenue guarantee is 86% of the county benchmark revenue. The county benchmark revenue for a crop is the five-year Olympic marketing year average (MYA) price multiplied by the five-year Olympic average county yield of the covered commodity. The actual county revenue is the actual average county yield of the covered commodity multiplied by that year's MYA price. 

The payment rate for that particular covered commodity is equal to the crop's benchmark guarantee minus the crop's actual revenue, not to exceed 10% of the county benchmark revenue for the crop.  A payment for a farm is calculated using 85% of the covered commodity base acres on the farm times the payment rate, times the producer's share of interest in the farm.

Let's use Scotts Bluff County as an example. Using USDA NASS data, it is determined that the five-year Olympic average yield for Scotts Bluff County is 150 bushels per acre. The five-year Olympic average price for corn from 2009-13 is $5.29 per bushel. These Olympic averages are multiplied together to obtain the Scotts Bluff County Benchmark for 2014, $793.50. The payment guarantee is equal to 86% of the benchmark, in this case $682.41.

Dividing the ARC-CO benchmark by the reported yield provides the maximum 2014 Marketing Year Average (MYA) price to obtain an ARC-CO payment.

The Scotts Bluff "blended" yield for corn is 177.5 bushels per acre. For Scotts Bluff County the MYA price must be below $3.85 per bushel to receive an ARC-CO payment. The current estimated MYA price per bushel is $3.61 (FAPRI Feb. 17, 2015). Thus, if the price estimate is correct, those who enroll their corn base acres in ARC-CO for Scotts Bluff County might expect to obtain an ARC-CO payment.

This example is provided for educational purposes only.  The MYA price estimate changes every month, and there is no guarantee that the estimated price will be the final price used to calculate payments.

Panhandle Farm Bill Contact

The deadline to enroll in a commodity program is March 31, 2015.  If you have questions about the farm bill, please contact Jessica Johnson, Extension Educator at the UNL Panhandle Research and Extension Center, 308-632-1247 or jjohnson@unl.edu.

Jessica Johnson and Tim Lemmons
UNL Extension Educators

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