What’s my Maximum Yield?
Yesterday we wrote that FSA had released current ARC payments for most of the 2018 crops.
We were able to take this information and try to calculate what the maximum yield for each county in the database (some counties are missing information, etc.) would need to be before a farmer could start to collect any payment.
For example, we looked at corn for Buchanan County, Iowa. The Olympic average yield for 2019 is 188 bushels. We take this times the Olympic average price from FSA of $3.70 (which is also the reference price) results in Olympic revenue of $695.60. Your guarantee is 86% of this number or $598.22. The maximum payment is $69.56. The estimated MYA price from FSA is $3.60. If we divide $598.22 (the guarantee) by $3.60 we come up with 166 bushels. This means the 2019 county average yield has to be no more than 166 to start getting an ARC payment. The maximum payment would start at a yield of 147 bushels. Any yield less than 147 would not increase your ARC payment.
There are about 17,650 rows of data in the FSA database. If you are interested in finding out what your county “maximum” yield will be, shoot me an email at paul.neiffer@claconnect.com and I will let you know.
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.
What info do you have pertaining to these programs for Grant County, Washington. I raise dryland wheat.
Thanks
Raymond