ARC-CO Reports Are Net Not Gross

A reader sent an email to us indicating our reports of ARC-CO payments on corn for his county in Iowa were not correct.  This is a case where both of us are correct.  Our reports that we issued this week showed the estimated ARC-CO payments for each county on a net basis.  He was looking at the number and assuming they were on a gross payment per acre.  Our preference is to provide the report on a net basis since we know that payments will only be made on the basis of 85% of base acres.

Therefore, when you read the report, we are showing the payment after the 15% reduction. As an example, assume a county has an Olympic yield average of 180 bushels.  We times this by $5.29 to arrive at benchmark revenue of $952.20.  Our maximum payment is 10% of this number or $95.22.  Our reader was looking for that number.  The number we showed is $80.94 (85% of $95.22).

We are hearing reports that Ag Secretary Vilsack will announce today a delay in the base acre reallocation and payment yield update to March 31, 2015.  Based on our reports from farmers of less than 40% signed up at local FSA offices, we are not surprised by this.

Paul Neiffer, CPA