1. Analyzing the New Farm Safety Net
Jonathan Coppess
University of Illinois

2. A Difficult Farm Bill’s Challenges
What were the options for farmers?
How best to make a five-year choice filled with unknowns?
What did farmers decide and why?
What is the initial feedback on the decision and programs?

3. Farm Program Decision ARC-CO PLC ARC-IC County level revenue
5yr Olympic Averages
PLC
Fixed-price triggers
Deficiency payments
ARC-IC
Individual whole-farm revenue
5yr Olympic averages of all covered crops

4. Sorting Out The Farm Program Decision
McLean Co., IL: ARC-CO vs. PLC (160 bu. yield)

5. Farm Program Decision
FarmdocDaily, June 16, 2015

6. Farm Program Decision—Corn
ARC-CO: 91% of farms; 93% of base
FarmdocDaily, August 14, 2015

7. Farm Program Decision—Soybeans
ARC-CO: 96% of farms; 97% of base
FarmdocDaily, August 14, 2015

8. PLC’s Realities Commodity Reference Price 2014 MYA Price Payment Rate
Corn
$3.70 $0
Soybeans
$8.40
$10.10
Wheat
$5.50
$5.99
Peanuts
$535/ton
$440/ton
$95/ton
L.G. Rice
$14.00
$11.90/cwt
$2.10/cwt
M.G. Rice
$14.40/cwt
$0/cwt
T.J. Rice
$16.10
$21.40/cwt
Grain Sorghum
$3.95
$4.03

9. Feedback & Issues: Revenue’s Realities
County average yields are a factor in program, especially in high-yield years like 2014
Farmers had to consider this in the decision; difficult to make straight comparison with price-only PLC

10. Feedback & Issues: Revenue’s Realities
With FSA yields and $3.70 MYA price, estimated ARC-CO payments on corn
Yields had significant impact on payments for corn.

11. Feedback & Issues: A Tale of Two Counties
McLean County, IL (2014)
-Yield = 218 bu/acre
-MYA = $3.70
-Program Yield = 165 bu.
-Estimated ARC-CO = $0/base acre
-Estimated PLC = $0/base acre
DeKalb County, IL (2014)
-Yield = 196 bu./acre
-Estimated ARC-CO = $62.07/base acre

12. Feedback & Issues: Revenue’s Realities
ARC-CO for soybean base with FSA yields and $10.10 MYA price
Yields were again the determining factor for payments given a $12.27 per bushel benchmark price for ARC-CO

13. Feedback & Issues: Revenue’s Realities
ARC-CO on wheat with FSA yields and $5.99 MYA price
Reference price at $5.50 and benchmark price at $6.60; yields were again determining factor on payments

14. 2014 ARC-CO and PLC Payments

15. ARC-CO vs. PLC in 2014 Commodity PLC Payments ARC-CO Payments
Base in Program
Per Base Acre
Peanuts
$283,878,099
2,013,443
$141
Long Grain Rice
$308,627,163
4,007,809
$77
Corn
$3,283,483,819
90,057,276
$36
Wheat
$307,140,098
35,394,613 $9
Soybeans
$282,478,906
52,635,553 $5

16. Feedback and Issues: Revenue vs. Price
Reference price compared to the five-year Olympic average price.
Trade-offs between high yields and low(er) prices.
The unknown future.
Commodity
Reference
Benchmark
Corn (bu.)
$3.70
$5.29
Soybeans (bu.)
$8.40
$12.27
Wheat (bu.)
$5.50
$6.60
Rice (cwt)
$14.00
$14.17
Peanuts (ton)
$535
$557.40

17. Farm Program Decision Conclusions
Adding risk and complexity to risk management.
Decisions still follow the (expected) payments.
Strong acceptance of revenue-based assistance.

18. Web Tool Usage—Farm Bill Toolbox
Google Analytics
Total Hits (thru July): 1,917,149

19. Web Tool Usage: APAS
Google Analytics

20. Follow-Up on Program Decisions & Tools
Further Analysis of Web Tool Usage and FSA Election Data
Farmer/Landower Survey
Analysis of Web Tool Usage, Election Data and Survey Responses

21. Thank You! jwcoppes@Illinois.edu
Questions?
Thank You!