Farm Bill Has Long-lasting Economic Impacts

The economics of a new Farm Bill, from a market and price perspective, will be an essential component as Congress writes this legislation later this year.  University of Missouri Ag Economist Patrick Westoff took a look at corn prices and two Farm Bill safety-net offerings, ARC and PLC, at a recent Farm Foundation forum to illustrate this connection.

"Suppose that Farm Bill carries for current provisions...and suppose farmers have a new opportunity to make a choice between ARC versus PLC in 2019, and suppose that 70-percent of the farmers chose PLC, that's what we assumed last year as a baseline, if the price is 3-70 or 3-80 or above, there is no PLC payment."

Earlier this month, the USDA, forecasted the season-ending price for corn at 3-dollars 30-cents a bushel at the mid-point.

"For every timer it's below 3-70, spending on a PLC on an annual basis increases by $770-million. Now, a three-dollar corn price would correspond with $ 5.4 billion dollars of expense...just for corn...just for one year."