The $11 billion Farmer Bridge Assistance Program from the USDA is likely to change next year’s income forecast for most grain farmers. Gary Schnitkey, farm management specialist with the University of Illinois, says official details of the program haven’t been released, but projections show significant per-acre payments. “We come out close to $45 for corn per planted acre and $25 for soybeans,” he says.
He also said that expected farm safety net payments triggered by changes in this summer’s reconciliation package should also boost farm incomes.
“Combine that with what we’re projecting to be a $60 ARC/PLC payment, and we’re getting close to $100 of government support out there per acre.” He says, “That’s going to change returns from a projected negative to positive.”
However, U of I professor Nick Paulsen said, “So definitely a help in the short term, but some concerns in terms of this just delaying market adjustments that need to occur to get us back to a profitable situation for farmers without having to rely on government payments.”
EDITOR’S TAKE:
Farmers/ranchers always prefer to earn their income from the marketplace and not be dependent on government. However, because they are “Price Takers” not “Price Makers”, they are often at the mercy of geopolitical and economic circumstances beyond their control. In addition, food security is a national security issue, and we must preserve our ability to produce, process and distribute food in case of exogenous shocks that impact global supply chains. Thus, government support can be justified on that basis. The upcoming payments will, as the article points out, turn a negative year into a positive one. This will allow farmers/ranchers to reduce debt and prepare for the upcoming year.
In the meantime, be sure to promote your inventory on AgTruckTrader.com®. Also mention CADFI as the financing alternative that matches their payments with their income stream, be it monthly, quarterly, semi-annually or annually.
