By Curtis Mahnken
The Farm Service Agency (FSA) recently released 2016 county yields for corn, soybeans and wheat. These yields along with the marketing-year-average (MYA) prices which were released in September provide the information needed to calculate Agricultural Risk Coverage-County (ARC-CO) payments. These payments will be made in October 2017.
ARC-CO triggers a payment based on a crop’s base acres if the actual county revenue for that crop is less than 86% of the “benchmark” revenue. For corn, the MYA price (Table 1) is almost 30% lower than the benchmark price. Payments will be made in counties where the 2016 yield is up to 22% above the county benchmark yield. For wheat, payments will be triggered in counties where their yields are up to 48% above the benchmark yield.
Table 2 includes the payments per base acre by county for corn and wheat. These numbers have been adjusted to reflect the 6.8% reduction for budget sequestration. For soybeans, there are only two counties in Minnesota that will receive ARC-CO payments, Kittson ($12) and Lake of the Woods ($19).
The variability in payments between counties are a result of differences in the 2016 crop yield compared to the county benchmark that is based on 2011-2015 yields. There is significant variation not only in the 2016 yields but also in the benchmark yields between the counties. Counties with a high yield compared to their benchmark will not receive payments.
To calculate the payment for a farm, multiply the base acres by the payment for that county. A farm in Waseca County would receive $29 per base acre for corn. With a 300 acre corn base the payment would be 300 x $29 = $8,700.