Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Monday 11/18/13

Some Corn Farmers Would be Collecting PLC Payments Today

Farmers in parts of the northern and eastern Corn Belt would be collecting Price Loss Coverage payments on their corn crops this week IF the House version of the farm bill were in place.

DTN's market tracker shows corn for delivery selling as low as $3.17 a bushel in northeast Montana. Cash prices in several states show farmers would be receiving a target-price check for corn.

Currently, House and Senate negotiators are trying to come to conclusions on the commodity programs. Principal lawmakers continue to meet in private, but conferees have not announced any new public meetings on the farm bill this week.

The Price Loss Coverage program in the House bill is a renaming of the current counter-cyclical program that also increases target prices for most major commodities. Under the House bill, the target price for corn is $3.70 a bushel. That price would likely be set for the 2014 crop if the farm bill negotiators were to keep the House PLC in the final bill.

DTN's Market Tracker shows corn prices below $3.70 in parts of the eastern Corn Belt, notably throughout parts of Michigan and Ohio. Farther west, prices throughout North and South Dakota are hitting lows below $3.40 a bushel in some places with prices averaging more around $3.50 a bushel.

A few farmers in Kansas would also be collecting a small PLC payment for grain sorghum as well. The PLC target price for sorghum is $3.95 per bushel, but some elevators are reporting prices below $3.90 a bushel.

The PLC target price for soybeans is $8.40 per bushel. Prices remain at least $3 above that point throughout the DTN Market Tracker for soybean cash prices and basis.

The U.S. Senate was less supportive of target prices. Most Midwest senators on both sides of the aisle opposed keeping a target price safety net in the farm bill. However, Southern senators wanted to protect prices for rice and peanuts. The Senate came up with the Average Market Price program, or AMP. Under this program, most commodity price protections would be based on 55% of the Olympic average for that crop over the past five years. The price would also be calculated using base acres. Based on tables showing annual average prices going back to 2008, the target price for corn likely would be in the range of $2.99 to $3.08 a bushel for the 2014 crop.

Note: Reuters USDA reporter Chuck Abbott pegged the AMP target price at $2.83 a bushel for corn, using $5.15 as the Olympic average price for the calculation.

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Posted at 10:00AM CST 11/18/13 by Chris Clayton
Comments (3)
We know that they are already harvesting billions in crop insurance subsidies. Crop Insurance Subsidies Could Provide Bumper Crop of Budget Savings By: Scott Faber, Vice President of Government Affairs Wednesday, November 20, 2013 Looking for a way to save more than $60 billion? Reducing subsidies to large farm businesses, crop insurance companies and their agents, and trimming their windfall profits could generate enormous savings, EWG has found. EWGâ?™s analysis, based on Congressional Budget Office estimates developed during House and Senate consideration of the farm bill, demonstrates that taxpayers could harvest significant savings if Congress voted to: Reduce Crop Insurance Premium Subsidies to pre-2000 Levels. Legislation introduced by Sen. Jeff Flake (R-Ariz.) and Rep. John Duncan (R-Tenn.) would save taxpayers $40 billion over 10 years by gradually reducing average premium subsidies from 62 percent to 37 percent over five years. A recent CBO study found that immediately reducing the premium subsidies to an average of 40 percent would save $22.1 billion over the next 10 years, including $5 billion in the first two years. End the Harvest Price Option. Farmers are allowed to purchase revenue insurance policies linked to the price of the crop at harvest â?“ rather than the price the farmer expected to earn when he planted his crop in the spring. Eliminating this option would save taxpayers $8 billion over 10 years. Reps. Duncan and Henry Waxman (D-Calif.) filed an amendment to eliminate the option, but House leaders blocked a vote. Subject Crop Insurance to Means Testing. Means testing is not applied to crop insurance subsidies, unlike traditional farm subsidies. As a result, some farmers receive more than $1 million a year in premium support and more than 10,000 each collect more than $100,000 a year. Means testing to require the largest 1 percent of farm businesses to pay more of their risk management costs, which has twice been approved by the Senate, would save nearly $1 billion over the next 10 years. End Subsidies for Insurance Agents. Ending these subsidies would save taxpayers more than $11 billion over 10 years. A recent Congressional Budget Office study found that simply lowering the cap on agentsâ?™ subsidies from $1.3 billion to $915 million (9.25 percent of expected premiums) would save $5.2 billion. Share Risk with Insurance Companies. Renegotiating the risk-sharing agreements between the crop insurance companies and USDA to lower their guaranteed rate of return could save taxpayers billions more. Currently, USDA guarantees the insurance companies â?“ many of which are based in tax havens such as Bermuda and Switzerland â?“ a 14 percent rate of return. Since 2001, the companies have enjoyed $10.3 billion in underwriting gains â?“ while taxpayers have suffered a net loss of $276 million. Reducing subsidies to farmers, insurance agents and companies would still provide farmers with a robust safety net. Studies show that reducing crop insurance subsidies would not shrink the number of farm businesses that buy insurance but would instead encourage farmers to adjust their coverage levels. Moreover, cutting the subsidies would not increase the need for disaster payments. In fact, an EWG analysis found that crop insurance is more costly than the ad hoc disaster programs crop insurance was designed to replace. For more information, visit: http://www.ewg.org/farmbill2013/the-case-for-crop-insurance-reform
Posted by Wesley Kuster at 2:55PM CST 11/20/13
Wes please stop feeding us EWG and Heritage propaganda they have an agenda that is not in the farmers best interest.
Posted by melvin meister at 7:42AM CST 11/21/13
Forbes Fat Cats Collect Taxpayer-Funded Farm Subsidies: Forbes 400 Subsidy Recipients (1995 â?“ 2012) November 7, 2013 The billionaires profiting from farm subsidies were identified by matching EWGâ?™s Farm Subsidy Database with the Forbes 400 list of the richest Americans. [See original article.] Name Source of Farm Subsidies Paul Allen Net worth: $15.8 billion #26 on Forbes 400 Kona Residence Trust, which received $14,429 in barley subsidies from 1996 to 2006. Philip Anschutz Net worth: $10.3 billion #38 on Forbes 400 Clm Company, which received $553,323 in cotton, wheat, sorghum, corn, oat, barley and other farm subsidies from 1995 to 2003. Equus Farms, which received $53,191 in livestock subsidies in 2002. John Arrillaga Net worth: $1.8 billion #314 on Forbes 400 Peery & Arrillaga, which received $59,711 in wheat, sorghum, corn, barley, safflower and other farm subsidies from 1995 to 2006. Lee Bass Net worth: $2.1 billion #260 on Forbes 400 Panther City Cattle Company, which received $823,129 in cotton, wheat, corn and sorghum subsidies from 2000 to 2007. El Coyote Ranch, which received $297,950 in wheat, sorghum, corn, soybean, oat and barley subsidies from 1995 to 2002. Riley Bechtel Net worth: $3.4 billion #143 on Forbes 400 Fremont Investors, which received $484,283 in rice and other farm subsidies from 1995 to 2003. Stephen Bechtel, Jr. Net worth: $3.4 billion #143 on Forbes 400 Fremont Investors, which received $484,283 in rice and other farm subsidies from 1995 to 2003. Wild Goose Club, which received $947 in farm subsidies from 2006 to 2010. Eli Broad Net worth: $6.9 billion #59 on Forbes 400 Placer Ranch Partners LP, which received $56,880 in wheat and rice subsidies from 1995 to 2005. S. Truett Cathy Net worth: $6 billion #68 on Forbes 400 Rock Ranch LLC, which received $4,536 in livestock subsidies in 2003. Gayle Cook Net worth: $5.2 billion #85 on Forbes 400 Cedar Farm Harrison County Inc., which received $41,141 in soybean, corn and tobacco subsidies from 1998 to 2003. Richard DeVos Net worth: $6.8 billion #60 on Forbes 400 Ada Holdings LLC, which received $37,986 in corn, wheat and soybean subsidies from 2001 to 2006. Charles Ergen Net worth: $12.5 billion #32 on Forbes 400 Telluray Ranch, which received $117,826 in crop and livestock disaster payments from 2002 to 2008. Gerald J. Ford Net worth: $1.9 billion #296 on Forbes 400 Rio Hondo Land & Cattle Co. Inc., which received $222,433 in wool subsidies from 1995 to 2003. Harold Hamm Net worth: $12.4 billion #33 on Forbes 400 $26,785 in wheat subsidies and disaster payments from 1995 to 2002. Continental Resources of Illinois, which received $318 in disaster payments, corn and soybean subsidies from 2003 to 2004. Diane Hendricks Net worth: $4.4 billion #103 on Forbes 400 H&H Farms of Wisconsin Inc., which received $379,933 in corn, soybean, wheat, oat and other farm subsidies from 1998 to 2001. Ray Lee Hunt Net worth: $5.6 billion #74 on Forbes 400 Sharyland Limited Partnership, which received $110,270 in cotton, sorghum, sunflower and corn subsidies from 1998 to 2000. Hunt Oil Co., which received $49,381 in livestock subsidies in 2002. Paul Tudor Jones, II. Net worth: $3.7 billion #130 on Forbes 400 Buck Ridge Farms LLC, which received $8,260 in crop disaster payments, cotton, soybean, sorghum and corn subsidies from 1998 to 2003. Tudor Farms Inc., which received $1 in sorghum subsidies in 1996. George Kaiser Net worth: $10 billion #40 on Forbes 400 Kaiser-Francis Oil Company, which received $17,518 in wheat, sorghum and barley subsidies from 1996 to 2003. Jim Kennedy Net worth: $6.7 billion #61 on Forbes 400 $37,162 in rice, corn, sorghum, wheat, soybean, sunflower and other farm subsidies from 1996 to 2004. York Woods At Yonkapin Cutoff LLC, which received $19,545 in rice, sorghum and soybean subsidies from 2002 to 2003. Henry Kravis Net worth: $4.7 billion #95 on Forbes 400 M&T Chico Ranch, which received $511,633 in wheat, rice, corn, sorghum, sunflower, safflower, barley and other farm subsidies from 1995 to 2005. M&T Staten Ranch, which received $502,363 in corn and wheat subsidies from 1996 to 2002. Ann Walton Kroenke Net worth: $4.7 billion #95 on Forbes 400 JL Walton Trust, which received $13,273 in corn, wheat, sorghum, soybean and oat subsidies from 1996 to 2002. St. Roberts Centers & Farms, which received $6,642 in corn, wheat, sorghum and soybean subsidies from 1996 to 2002. $378 in corn and sorghum subsidies in 1995. Leonard Lauder Net worth: $7.6 billion #56 on Forbes 400 Horizon Organic Dairy Idaho Farm, which received $360,102 in wheat, diary, barley, corn and other farm subsidies from 1997 to 2004. Horizon Organic Dairy Maryland Farm, which received $202,088 in dairy, corn, soybean, wheat and other farm subsidies from 1998 to 2005. Nancy Walton Laurie Net worth: $4 billion #110 on Forbes 400 JL Walton Trust, which received $13,273 in corn, wheat, sorghum, soybean and oat subsidies from 1996 to 2002. St. Roberts Centers & Farms, which received $6,642 in corn, wheat, sorghum and soybean subsidies from 1996 to 2002. Marianne Liebmann Net worth: $2.6 billion #209 on Forbes 400 Morse Land Co. Ltd., which received $4,282 in livestock, barley, oat, wheat and other farm subsidies from 2000 to 2005. Whitney MacMillan Net worth: $3.8 billion #122 on Forbes 400 $25,226 in wheat and barley subsidies from 1996 to 1999. Wild Eagle Mountain Ranch LLC, which received $10,417 in wheat and barley subsidies from 2001 to 2003. Neal Patterson Net worth: $1.5 billion #352 on Forbes 400 $51,911 in wheat and sorghum subsidies from 1995 to 2001. Southpoint Farms LLC, which received $66,770 in disaster payments, wheat, sorghum and other farm subsidies from 2002 to 2012. Richard Peery Net worth: $2.1 billion #260 on Forbes 400 Peery & Arrillaga, which received $59,711 in wheat, sorghum, corn, barley, safflower and other farm subsidies from 1995 to 2006. Anthony Pritzker Net worth: $3 billion #166 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Daniel Pritzker Net worth: $1.95 billion #293 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Jay Robert Pritzker Net worth: $3 billion #166 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Jean (Gigi) Pritzker Net worth: $2.1 billion #260 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Jennifer Pritzker Net worth: $1.7 billion #327 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. John Pritzker Net worth: $2 billion #273 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Karen Pritzker Net worth: $3.3 billion #151 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Linda Pritzker Net worth: $1.8 billion #314 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Nicholas Pritzker, II. Net worth: $1.35 billion #382 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Penny Pritzker Net worth: $2.2 billion #252 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Thomas Pritzker Net worth: $2.7 billion #201 on Forbes 400 Chicago Mill & Lumber Co., which received $1,604,288 in cotton, soybean, corn, sorghum, wheat, rice, oat and other farm subsidies from 1996 to 2006. Stewart & Lynda Resnick Net worth: $3.5 billion #134 on Forbes 400 Paramount Land Co. LP, which received $576,603 in wheat, cotton, corn, sorghum and other farm subsidies from 1995 to 2002. David Rockefeller, Sr. Net worth: $2.8 billion #193 on Forbes 400 $563,715 in corn, soybean, wheat, oat, sorghum and other farm subsidies from 1996 to 2006. Robert Rowling Net worth: $4.9 billion #93 on Forbes 400 Rowling Ranch Corp., which received $157,427 in corn, sorghum and livestock subsidies from 2000 to 2008. Fayez Sarofim Net worth: $2 billion #273 on Forbes 400 Holly Sugar Corp., which received $51,246 in wheat, corn, barley, sugar beet, oat and other farm subsidies from 1995 to 2003. FS Ranch Corporation, which received $67,125 in livestock subsidies in 2002. Charles Schwab Net worth: $5.1 billion #88 on Forbes 400 $525,593 in rice and other farm subsidies from 1995 to 2003. Walter Scott, Jr. Net worth: $2.2 billion #252 on Forbes 400 $62,031 in livestock subsidies in 2002. Double Eight Land Corp., which received $41,101 in livestock subsidies in 2002. Harold Simmons Net worth: $10 billion #40 on Forbes 400 Dixie Rice Agriculture Corp., which received $677,300 in rice, sorghum and other farm subsidies from 1995 to 2003. Southwest Louisiana Land Co Inc., which received $272,511 in disaster payments, rice, soybean and other farm subsidies from 1995 to 2003. Contran Realty Corp., which received $17,754 in rice and other farm subsidies from 1996 to 2003. Contran Corp., which received $2,960 in wheat subsidies from 1998 to 2000. Warren Stephens Net worth: $2.5 billion #222 on Forbes 400 Stephens Group Incorporated, which received $146,260 in peanut, wheat, corn, oat, sorghum and other farm subsidies from 1996 to 2003. Greenbriar Lodge LLC, which received $86,642 in rice, soybean and wheat subsidies from 2002 to 2008. Glen Taylor Net worth: $1.7 billion #327 on Forbes 400 Glen A. Taylor Revocable Trust, which received $832,970 in corn, soybean, wheat, oat and other farm subsidies from 1995 to 2007. Alice Walton Net worth: $33.5 billion #8 on Forbes 400 Robson Ranch Inc., which received $261,292 in crop disaster payments, wheat, soybean, corn and other farm subsidies from 1995 to 2008. Jim Walton Net worth: $33.8 billion #7 on Forbes 400 Robson Ranch Inc., which received $261,292 in crop disaster payments, wheat, soybean, corn and other farm subsidies from 1995 to 2008. S. Robson Walton Net worth: $33.3 billion #9 on Forbes 400 Robson Ranch Inc., which received $261,292 in crop disaster payments, wheat, soybean, corn and other farm subsidies from 1995 to 2008. Leslie Wexner Net worth: $5.7 billion #73 on Forbes 400 LAW Plantation Co. LLC, which received $209,717 in wheat, corn, sorghum and oat subsidies from 1997 to 2003. The New Albany Co., which received $13 in farm subsidies in 1996.
Posted by W Kuster at 7:04PM CST 12/01/13
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