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National & World Ag News Headlines |
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High Yields and Aid Help Offset Low Commodity Prices
USAgNet - 10/19/2018
Record-high crop yields and new government aid are expected to help insulate Ohio crop farmers from significant financial losses that would have occurred because of low commodity prices, according to a recent Ohio State University study.
If net income for farms across Ohio this year follows the projected national trend, then it will decrease by 15 percent compared to last year's total.
But it could have been a whole lot worse.
Fortunately, Ohio farmers, on average, are basking in high yields. The average yields of both soybeans and corn are projected to beat the state's previous record highs. Soybeans, which are estimated to average 60 bushels per acre, are expected to top last
year's average by 19 percent, and the 190 bushel-per-acre average for Ohio corn is up 11 percent from 2017's average, according to the U.S. Department of Agriculture (USDA).
"It's not just a good year in terms of yields statewide, it's an incredible year. And that's helping our financial standing," said Ben Brown, manager of the farm management program in the College of Food, Agricultural, and Environmental Sciences (CFAES) at The
Ohio State University.
Brown is one of three authors of a recent CFAES study about a new government compensation program called the Market Facilitation Program (MFP), which is aimed at helping offset farmers' losses as a result of the recent overseas tariffs on U.S. goods. The
study's two other authors are Ian Sheldon, an agricultural economics professor in CFAES who serves as the Andersons Chair in Agricultural Marketing, Trade and Policy; and Haylee Zwick, a graduating senior in CFAES's Department of Agricultural,
Environmental, and Development Economics, where Brown and Sheldon work.
Through the new government aid program, the per-acre compensation to Ohio growers on average will be $47.85 for soybeans, 94 cents for corn, $5.25 for wheat, $4 per pig and 6 cents per 100 pounds of milk, the study found. The estimates are based on
average yields and will vary, so farms with below-average yields will be compensated at lower rates.
An Ohio farmer with 1,100 acres who harvests 660 acres of soybeans and 440 acres of corn is estimated to receive a government compensation payment of $31,988 before taxes, according to the study. That payment will supplement whatever the farmer earns
from crop sales.
The compensation is being offered in part because the per-bushel prices for corn and soybeans, the most commonly grown crops in Ohio, have plummeted. That's due to foreign tariffs imposed this year on soybeans, corn and other U.S. goods sold abroad, as
well as greater than average supplies of both crops, Brown said.
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