NDSU Extension - Mercer County


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North Dakota Farm Bill Payments will vary in 2018

farm bill payments, government payments

Submitted by Craig Askim, Extension Agent/Agriculture and Natural Resources

Many producers are wondering if there will be government payments from the 2017 production year. Below is the best estimate based on final year marketing prices.

All wheat base enrolled in PLC will receive payments, totaling more than $50 million after sequestration.

Producers with wheat, canola, barley and sunflower base acres and counties in the western half of North Dakota will receive the bulk of farm bill payments for the 2017 crop year, which are dispersed in late 2018.

“The payments are not official because the 2017 national marketing year average prices and county average yields are not final,” says Andy Swenson, North Dakota State University Extension farm and family resource management specialist. “However, there is enough preliminary information to provide a close estimate.”

Total payments after a 6.9 percent reduction for sequestration should be about $290 million, with payments on the wheat base accounting for more than 60 percent of the total.

Base acres of canola, barley and sunflowers should provide payments of about $43 million, $23 million and $15 million, respectively, after sequestration.

Under the farm bill, producers could choose the Agricultural Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program for each crop on a farm.

More than 75 percent of North Dakota’s 9.6 million wheat base acres are enrolled in the ARC program. Total ARC payments on the wheat base will be about $126 million.

Due to strong yields in 2017, the six Red River Valley counties and Sargent County will most likely not receive ARC payments on the wheat base.

Thirty-three counties, including the western half of the state, will receive the maximum ARC payment due to low wheat yields from drought.

Payments are applied to only 85 percent of base acres; therefore, the effective rate averaged across all wheat base acres would range from $30.17 in Barnes County to $17.17 in Grant County. Thirteen counties in the eastern half of North Dakota should receive some ARC payment on the wheat base but less than the maximum.

Eighty percent of North Dakota’s nearly 1.2 million acres of barley base is enrolled in the PLC program. This is the first year with a PLC payment on barley.

The projected 2017 national marketing year average barley price of $4.50 per bushel is below the reference price of $4.95, which was set in the 2014 farm bill, and would trigger a 45-cent-per-bushel payment rate on the farm’s PLC payment yield.

Also, all counties but one in the western two-thirds of North Dakota will receive barley ARC payments.

Nearly all of the state’s corn and soybean bases are enrolled in ARC. Only western counties, which have low corn and soybean bases, triggered payments.

Total payments, after sequestration, will be about $10 million each for North Dakota’s corn and soybean base acres.

Producers can use the 2017 ARC-PLC Calculator at https://www.ag.ndsu.edu/farmmanagement/tools to estimate farm bill payments.

Source: Andrew Swenson – andrew.swenson@ndsu.edu

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