University of Minnesota Extension
www.extension.umn.edu
612-624-1222
Menu Menu

Extension > Agricultural Business Management News > 2016 ARC-CO Payments for Minnesota

Wednesday, October 11, 2017

2016 ARC-CO Payments for Minnesota

By Curtis Mahnken and Bob Craven, Center for Farm Financial Management, Applied Economics

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.





No comments:

Post a Comment

  • © Regents of the University of Minnesota. All rights reserved.
  • The University of Minnesota is an equal opportunity educator and employer. Privacy