| Gary Schnitkey |
| FEFO 09-14, 9/18/2009 |
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Abstract
Farmers who signed up for the Average Crop Revenue Election (ACRE) can change their crop priority by September 30. Priorty will matter only to farms where planted acres times 1.2 exceeds total base acres.
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| ACRE Will Likely Pay More than the Traditional Alternative for Receiving Farm Commodity Payments
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| Gary Schnitkey and Nick Paulson |
| FEFO 09-12, 8/5/2009 |
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Abstract
Based on historical experience for corn, soybean, and wheat acres in Illinois, the ACRE program is expected to generate payments that exceed the direct payments given up to enroll in the program over time. The chance of ACRE payments being triggered for corn, soybeans, and wheat in 2009 is projected to be higher than average.
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| Historical Analysis of ACRE
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| Gary Schnitkey and Nick Paulson |
| FEFO 09-11, 7/20/2009 |
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Abstract
We conducted an historical analysis of the Average Crop Revenue Election (ACRE) program using data from 1977 through 2007. This analysis provides indications of: the frequency of ACRE payments, the size of ACRE payments, and the frequency farm triggers are met.
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| Five-Year Olympic Average Yields and ACRE
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| Gary Schnitkey |
| FEFO 09-07, 4/30/2009 |
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Abstract
Five-year Olympic average yields will enter into the calculation of eligibility and amount of payments received under Average Crop Revenue Election (ACRE), an option made available in the 2008 Farm Bill for receiving commodity program payments. In this paper, differences in 2009 Olympic average yields across farms are examined using Illinois Farm Business Farm Management (FBFM) yield data.
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| Questions and Answers About the ACRE Provision of the 2008 Farm Bill
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| Dale Lattz, Gary Schnitkey and Nick Paulson |
| FEFO 09-01, 1/9/2009 |
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Abstract
This document describes the ACRE program, a choice farmers have for receiving Federal farm commodity payments.
This document describes the ACRE program, a choice farmers have for receiving Federal farm commodity payments.
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| Crop Insurance Decisions in 2005
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| Gary Schnitkey |
| FEFO 05-04, 02/28/2005 |
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Abstract
Farmers and share-rent landlords have until March 15th to make changes to their crop insurance programs. This article provides an update for making 2005 decisions. Three topics are covered: 1) changes in crop insurance programs in 2005, 2) group product update, and 3) crop insurance considerations given the possibility on soybean rust.
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| Lower Grain Prices Result in Increased Loan Deficiency Payment Activity for the 2004 Corn and Soybean Crop
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| Dale Lattz, Gary Schnitkey |
| FEFO 05-02, 01/31/2005 |
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Abstract
Farm bills implemented in 1996 and 2002 contained provisions for nonrecourse marketing assistance loans and loan deficiency payments (LDP's). In essence, these programs place floors under prices that farmers could receive at loan rates. When cash prices are below loan rates, farmers can receive LDPs. Another alternative is to use marketing loan provisions that allow producers (under certain conditions) to take out marketing loans on grain at loan rates. When cash prices are below loan rates, farmers can repay a 9-month nonrecourse commodity loan at less than the loan rate, plus accrued interest and other charges or receive an LDP in lieu of obtaining a loan. In other words, generally speaking, if local cash prices are below the commodity loan rate, producers can receive the difference through either a market loan gain or an LDP. Current loan rates in Illinois for corn, soybeans and wheat average about $2.02, $5.14 and $2.54 respectively. These rates vary by county.
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| Higher Grain Prices Result In Less Loan Deficiency Payment Activity
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| Gary Schnitkey, Dale Lattz |
| FEFO 03-21, 11/11/2003 |
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Abstract
The last two farm bills implemented in 1996 and 2002 contained provisions for nonrecourse marketing assistance loans and loan deficiency payments (LDP's). In essence, these programs place floors under prices that farmers could receive at loan rates. When cash prices are below loan rates, farmers can receive LDPs. Another alternative is to use marketing loan provisions that allow producers (under certain conditions) to take out marketing loans on grain at loan rates. When cash prices are below loan rates, farmers can repay a 9-month nonrecourse commodity loan at less than the loan rate, plus accrued interest and other charges or receive an LDP in lieu of obtaining a loan. In other words, generally speaking, if local cash prices were below the commodity loan rate, producers could receive the difference through either a market loan gain or an LDP. If this was the case, most producers took advantage of the program by taking an LDP. Current loan rates in Illinois for corn, soybeans and wheat average about $2.06, $5.16 and $2.59 respectively. These rates vary by county.
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| Recognizing Income and Budgeting for Counter Cyclical Payments
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| Gary Schnitkey, Dale Lattz |
| FEFO 03-16, 08/29/2003 |
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Abstract
The counter cyclical (CC) program authorized under the 2002 Farm Bill can make payments for a program year across two calendar years. For example, payments for the 2003 program year can occur in 2003 and 2004. Many farmers prepare financial statements at the end of the year. At year-end 2003, income from the 2003 program year that will be received in 2004 should be recognized on the 2003 income statement, thereby causing a matching of revenue to expenses. At year-end 2003, however, the amount of CC payments that will occur in 2004 will not be known. Not knowing the amount of future CC payments presents difficult in 1) determining how much revenue to recognize on the 2003 income statement and 2) determining the amount of CC payments to include on 2004 cash flow budgets. This newsletter addresses these two issues. Before discussing these issues, the mechanics and timing of CC payments are described because they have direct impacts on revenue recognition and cash flow budgeting.
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| Options for Determining Base Acres Under the 2002 Farm Bill
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| Gary Schnitkey |
| FEFO 02-16, 08/30/2002 |
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Abstract
Between October 1, 2002 and April 1, 2003, farmers and landowners will choose one of five options for determining base acres under the 2002 Farm Bill. This choice influences direct and counter-cyclical (CC) payments that will be received for crops grown in 2002 through 2007. The decision also will impact whether the yields used to calculate CC payments can be partially updated (see Updating Acres and Yields Under the 2002 Farm Bill at http://www.farmdoc.uiuc.edu/manage/newsletters/html/fefo02_11.html for further descriptions). The five options are:
1. Retain 2002 Production Flexibility Contract (PFC) acres,
2. Retain 2002 PFC acres and add minimum eligible oilseed acres,
3. Exchange 2002 PFC acres for maximum oilseed acres,
4. Update acres using the average of acres planted or prevented planting from 1998 through 2001, and
5. Exchange existing 2002 PFC acres with less than maximum or more than minimum oilseed acres.
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| Corn and Bean Acreage in Illinois Under The 2002 Farm Bill
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| Gary Schnitkey, Dale Lattz |
| FEFO 02-14, 07/24/2002 |
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Abstract
The 2002 Farm Bill alters loan rates such that corn production may become more profitable relative to soybean production. As a result, some Illinois farmers may increase corn acres while they decrease soybean acres. This newsletter analyzes the economics of such a switch by 1) describing features of the 2002 Farm Bill that increase the attractiveness of corn versus soybean production, 2) analyzing costs and returns for growing corn and soybeans under different rotations, and 3) analyzing how corn yields relative to soybean yields affect the decision to switch from soybean acres to corn acres.
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| 2002 Farm Bill Payment Limitations
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| Dale Lattz, Gary Schnitkey |
| FEFO 02-13, 07/17/2002 |
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Abstract
The Farm Security and Rural Investment Act of 2002 contain provisions limiting the amount of payments a "person" can receive per program year. These limits are $40,000 for direct payments, $65,000 for counter-cyclical payments and $75,000 for loan deficiency payments (LDP's) and marketing loan gains. Farm sizes that cause payments to exceed these limits are illustrated in the following sections. Then, a definition of a "person" is given. This definition along with other entity rules comes directly from the Farm Service Agency (FSA) Fact Sheet "Payment Eligibility and Limitations" (see http://www.fsa.usda.gov/pas/publications/facts/html/payelig01.htm).
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| Farm Program Payment Comparisons under the 1996 and 2002 Farm Bill
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| Dale Lattz, Gary Schnitkey |
| FEFO 02-12, 06/14/2002 |
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Abstract
Considerable discussion has arose concerning the level of government expenditures estimated under the recently passed Farm Security and Rural Investment Act of 2002, hereafter referred to as the 2002 Farm Bill, as compared to the 1996 Federal Agriculture Improvement and Reform Act (FAIR), the 1996 Farm Bill. Popular press articles have indicated as much as a seventy percent increase in government payments under the new bill. Generally, these comparisons have not taken in consideration the additional marketing loss assistance payments that have been paid since 1998. This paper looks at provisions contained in the Commodity Title of the new Farm Bill and estimates payments for representative Illinois grain farms for 2001 under the 1996 Farm Bill and the 2002 Farm Bill. Caution must be taken in reviewing the results as these estimates are based on a current understanding of provisions of the new Bill. Final regulations have not been released.
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| Brief Highlights of the 2002 Farm Bill
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| Bob Hauser |
| FEFO 02-11, 06/07/2002 |
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Abstract
The 2002 Farm Bill, representing a collection of compromises between the House and Senate Bills, became law on May 13, 2002. It is a six-year bill entitled "Farm Security and Rural Investment Act of 2002."
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| Updating Acres and Yields Under the 2002 Farm Bill
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| Gary Schnitkey, Dale Lattz |
| FEFO 02-10, 06/05/2002 |
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Abstract
The Farm Security and Rural Investment Act of 2002, hereafter referred to as the 2002 Farm Bill, includes provisions authorizing direct and counter-cyclical payments for 2002 through 2007 crops. These payments will be determined using base acres and program yields. Farmers and landowners have one-time decisions to make concerning these acres and yields. They either can "update" acres to reflect acres from 1998 through 2001 or they can "not update" and have acres based on those used to calculate Agricultural Marketing Transition Act (AMTA) payments. If base acres are updated, farmers also can update yields used to determine counter-cyclical payments.
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| Farm Bill 2002: Income Impacts of House Ag. Committee's Proposal
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| Gary Schnitkey, Paul Ellinger, Dale Lattz |
| FEFO 01-19, 09/25/2001 |
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Abstract
The 1996 Farm Bill -- more formally known as the Federal Agriculture Improvement and Reform (FAIR) Act -- legislates the Agricultural Market Transition Act (AMTA) payments that farmers currently receive. This Bill and its associated AMTA payments will expire at the end of 2002. Sometime between now and early 2003 a new Farm Bill likely will be enacted by Congress. This "2002 Farm Bill" will replace the 1996 Farm Bill.
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| Government Payments To Illinois Grain Farms
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| Gary Schnitkey |
| FEFO 00-03, 12/19/2000 |
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Abstract
Federal government payments have shored up net incomes on Illinois grain farms during the extended period of low commodity prices occurring since 1998. This article lists government payments received by crop farms in 2000. Impacts on farm decision-making then are examined.
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