The decision time for the farm bill may be past.
Or you may still be undecided on which program to sign up for.
By the time you read this, you will have already signed up for your base acres and yields for this farm program. I have massaged the numbers regarding ARC and PLC to the point they donít make sense Ė and it comes down to your general feeling on the outlook for the next four years.
The meetings around the state showed you the mechanics behind the calculations. At least three web sites offered tools to put your information in and showed you results as they calculated them. But they all had price scenarios set up for the calculations. I made a graph that I think shows your decision.
This is a graph of Ottawa County yields against the marketing year average prices (MYA). You can see a definite price change before 2005 and after. Thatís the real question to me. Are we going to bounce around the $4.55 2006 to 2014 average for milo? Or are we heading back below $3 as it used to be?
If you put your finger down on the point you think the next four years of prices and yields will average, I can show what looks best between ARC County, PLC or ARC Individual. But thatís the catch. No one knows or can tell you what the future holds. No K-State professor, banker or insurance agent can tell you that or wants to.
In Kansas, our yields can change 30 percent or more year to year. My county on milo has ranged from 37 bushels to the acre to 98 in the 2006 to 2013 time frame. Other parts of the country donít have our yield variability. That is the problem with national farm bills, they donít always fit a specific area the best.
However, in the midst of these uncertainties, you have to choose.
I came back to farm in 1976. I didnít start tracking the farm bill programs till 1984. Iíd say this is the fifth or sixth farm bill I have analyzed on the units I farm. By far this is the most onerous one to figure out how it impacts you and what are your best choices. I have heard some people question who the ďdevilsĒ were who stayed up at night concocting as convoluted a plan as they could.
I simulated 200 trial runs using seven random variables. I did not look at ARC Individual for these 200 trials. It would have added four more random variables. I have graphed the information from the 200 simulations. But the conclusion is back to what I said above. Pick the yield and price and then I know the answers. Until you do that, all I have are busy graphs. A quick depiction shows the variability I showed around each average price for the 5 years.
It reminds me of what I have seen in people advising farmers on commodity trading and future prices Ė if you say the same thing long enough, eventually you will be right. I think this farm bill program selection will be the same.
Before 2018 is done, I think all sides will be right at least once.
Steve Clanton calls himself a ďhas been.Ē He has been president of the Kansas Association of Wheat Growers; has served on the board of 21st Century Grain Processors Co-op, which is now sold; and has served on the Kansas Wheat and Kansas Soybean Commissions. Clanton also has been on the school board, NRCS board, extension board and North Central Farm Management board. He farms 3,100 acres of soybeans, milo and wheat, as well as some corn and sunflowers, in Ottawa County.