Where Do They Get These Numbers?
The Washington Post had an editorial on Sunday blasting the Farm Bill for being more costly than the old farm bill in some cases. However, in my opinion, their view is very slanted toward just this year and clearly reflects wrong numbers in their analysis. They indicate that many corn farmers in Ohio, Iowa, Minnesota and Kansas will receive corn payments of $60 to $200 per acre. I agree with the $60 number, however, there is no way that any corn grower can get even close to a $200 per acre corn payment.
For ARC-CO, the county corn yield would need to average about 445 bushels per acre to receive that amount of payment. This is based upon the maximum benchmark revenue of $2,352.94 ($2,000 divided by 85%) times 10% equals $235.29 times 85% equals a net of $200 per acre. If we divide $2,352.94 by $5.29 we arrive at 444.79 bushels per acre.
The highest possible corn county in the US is Benton County in Washington state. Their Olympic average yield is 256 bpa (rounded) times $5.29 equals benchmark revenue of $1,354.24 times 10% equals gross maximum payment of $135.42 times 85% equals $115.10.
I am sure the Post is showing their political stance on this issue, but it would certainly be nice if they would get the numbers right. Also, they are only showing this for corn acres and not reflecting the likely zero payments per acre for the same farmer for their soybean and wheat acres.
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.
Comments are closed.