Estimate of 2014 Corn ARC-CO Payments for $3.50-$4.00 Corn
As in our previous post, I spent a lot of my day on Friday taking NASS data released last week and coming up with my estimates of corn ARC-CO payments for the 2014 crop year. Several readers have already asked me for data on their county and since I finally made it home from Iowa last night at Midnight (after having one flight canceled, one maintenance issue and one De-Icing truck that broke down in Cedar Rapids), I have taken the data and summarized in a table for all counties reported by NASS. However, based upon several email conversations with various readers, I need to provide more detail on the NASS data release:
- First, not all counties are reported by NASS. Many counties are simply lumped together into a “combined” category. For those counties, my report does not provide any data on that particular county. If your county is not listed in the report, I would look at the numbers for your near-by counties and extrapolate a payment from that data. As an example, I live in Benton County, Washington State. This county is not listed in the NASS data, however, Franklin County is right across the Columbia River from Benton County and its data is listed. Franklin County shows a payment of $96.68 per corn base acre assuming corn MYA is less than $4.00 (as a matter of fact, corn MYA could rally all the way to $4.72 and not change the ARC-CO payment due to the Olympic average yield of 215 versus final 2014 yield of 183). Benton County Olympic average is about 10 bushels higher than Franklin County, so a farmer in Benton County could assume their payment would be slightly over a $100 per acre and be fairly close.
- The NASS publications that contain charts for each states showing the yield per acre are for harvested yields. The ARC-CO calculations require yields per PLANTED acre, therefore, I had to adjust to the yield per planted acre. NASS provides total planted acres so the calculation is fairly easy, however, you cannot get that yield directly from NASS.
- When adjusting from harvested yield to planted yield, it usually results in a reduction in yield by 1-5 bushels. However, in many counties, the difference can be dramatic. For example, Stanislaus County in California had a 125 bushel yield on about 800 actual harvested acres. However, farmers in the county planted 49,000 acres of corn, thus, there planted yield was only 2 bushels per acre. Sioux County in Iowa went from 187.4 (harvested yield) to 157.7 (planted yield). The 157.7 is what we use for ARC-CO calculations.
- I am not sure if FSA will use the NASS database to come up with their yields or if they have additional data that comprises their final yields. I reviewed some of the FSA yield numbers for previous years to the NASS data and in most cases the yields were very comparable. Usually the yield is within a bushel of the NASS data. However, where we have the large swings from harvested to planted yields, final FSA numbers may be different from NASS.
- There may be some rounding adjustments with final FSA numbers as compared to my numbers. I am not sure if FSA will round to the nearest whole number, tenths or hundredths. The difference would be minor, but there could be a difference.
Here is a quick link to a report by the major corn growing states (if your state is not listed and you want the report, send an email to me at paul.neiffer@claconnect.com):
Paul Neiffer, CPA
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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