Counter-cyclical and Marketing Loan Programs in 2012

Those farmers who did not elect to take ACRE are eligible to receive counter-cyclical payments when MYA prices are below the following trigger prices:

  • Corn: $2.35/bu. trigger price
  • Soybeans: $5.56/bu. trigger price
  • Wheat: $3.56/bu. trigger price

It is highly unlikely that MYA average prices fall below these trigger prices. As stated above, midpoints of ranges projected by WASDE are $5.90 for corn, $14 for soybeans and $6.80 for wheat.

Marketing loan gains or loan deficiency payments in 2012 are unlikely. Loan rates are below trigger prices and WASDE projections. National loan rates are $1.95/bu. for corn, $5 for soybeans and $2.94 for wheat. These loan rates are reduced by 30% if the farmer is enrolled in ACRE.

SURE in 2012

The SURE program is not authorized for 2012 in the 2008 Farm Bill. Congress would have to reauthorize SURE for 2012 before SURE payments would occur.

Note, however, that farmers should not ignore SURE. Sometime this fall, signup for the 2011 program will begin. Farmers that experienced yield losses in 2011 may be eligible for 2011 SURE payments

 

Summary

Commodity programs authorized the 2008 Farm Bill and SURE likely will not make payments in 2012. This year sets up such that crop insurance is the primary from of protection against low revenues. As illustrated in this post, many producers in Illinois will receive large payments from crop insurance.