Special Edition Ep. Farm Bill and Economic Assistance

00;00;07;22 – 00;00;28;27
Dr. Hunter Biram
Hello, everyone. This is not a good morning. Good morning. This is a good afternoon. Good afternoon. My name is Hunter Biram and, I am not Riley Smith either. But I’m coming at you with a special, update on, economic assistance to farmers. And, actually, we have somewhat good news here, as there is economic assistance to farmers included in the year end legislation.

00;00;28;29 – 00;00;57;24
Dr. Hunter Biram
Certain congressional leadership released a 1547 page draft of a continuing resolution or a CR, which includes $10 billion in economic assistance for farmers. It also includes a one year extension of the 2018 farm Bill through 2025. And, it funds the government through March the 14th next year. The Economic Assistance for farmers follows the pay mechanism laid out by the Farmer Revenue Assistance Mitigation Act, or the Farm Act, introduced by Congressman Trent Kelly out of Mississippi.

00;00;57;27 – 00;01;17;13
Dr. Hunter Biram
The payment, which is outlined on pages 34 through 41 of the CR, is based on three key variables. The national season average price report and ten year national average yield. And the 2024 cost production. Now, one thing I want to say is that, there are two key elements of this payment mechanism that differ from the Farm Act.

00;01;17;16 – 00;01;39;08
Dr. Hunter Biram
Now, that is the payment factor and the minimum payment calculation. And so the main factor is not new. The minimum payment calculation is new. But what is new about the payment factors. That has been reduced to 26% of the estimated economic loss, which is different than the 60%, factor that was used in the Farm Act. So that, payment factor has been reduced by more than half.

00;01;39;10 – 00;02;06;05
Dr. Hunter Biram
But what is new is this minimum payment increment. So the minimum payment is the product of 8% of the 2014 statutory reference price and the national average PLC payment yield. Now I say 2014 reference price. That statutory reference price has not changed since 2014. That’s what a lot of the farm bill debate is stemming up right now. So I could say 14, I could say 15, I could say 23, 22.

00;02;06;06 – 00;02;26;03
Dr. Hunter Biram
And that statutory reference price isn’t going to change. But I went all the way. And just just to be clear, this is from the 2014 farm bill. And then we have this plc, payment you’ll which I’ll talk about here. Just a second. Now I’m going to talk about nine pro nine program crops, that are relevant for southeastern states.

00;02;26;06 – 00;02;46;06
Dr. Hunter Biram
Three of them should expect to see the minimum payment bigger than the estimated payment. And we’ll talk about that in just a second. But these crops include barley, peanuts and rice. The other six program crops considered, we’ll see, will receive the estimated payment per acre. And that would include corn, cotton, grain, sorghum, oats, soybeans and wheat.

00;02;46;08 – 00;03;20;12
Dr. Hunter Biram
Okay. So by crop let’s talk about what these pay rates look like. So for barley looking at $22.60 per acre, corn $43.80 per acre, cotton $84.70 per acre. Grain sorghum 4185. So $41.83 per acre. Oats $80.14 per acre. Peanuts $76.48 per acre. Rice $69.76 per acre. Soybeans $30.61 per acre. Wheat $31.80 per acre. Now I’m saying this like it’s gospel.

00;03;20;12 – 00;03;44;04
Dr. Hunter Biram
It’s not. These are my calculations. They’re based on, all the data that’s been available so far, except for this new minimum payment, that’s going to be using, publicly available data from the USDA, FSA. And so, the payment yield I’m using is not a straight up average yield across all, across all counties. It’s actually a weighted average.

00;03;44;06 – 00;04;01;28
Dr. Hunter Biram
And so it’s found by keeping the total base acre production, which I’m calling it a base acre production, which is going to be the, the number of base acres enrolled in PLC times, the PLC payment yield. And then I’m going to take that production quote unquote number and divide that by the total amount of, base acres of PLC.

00;04;01;28 – 00;04;18;03
Dr. Hunter Biram
This is by crop. So that is a weighted average. Now, one parting note that I’m going to leave here is that while this has generated much interest over the past 24 hours, the KR has not passed. The deadline to pass a funding bill to avoid a government shutdown on Friday, December the 20th, that is this Friday.

00;04;18;05 – 00;04;39;18
Dr. Hunter Biram
That is two days from now. This implies that Congress has about two days to put together a package which will pass, speaker Mike Johnson and Senate Majority Leader Thune. I say majority leader. He’s the soon to be majority leader. John Thune, have both voiced support for economic assistance for farmers. Both immediately and in farm bill negotiation 2025.

00;04;39;21 – 00;04;59;11
Dr. Hunter Biram
However, there has been opposition from GOP hardliners who have voiced frustration over not pushing funding issues in the 2025 when the new administration takes office. National Agri Pulse so I’ll leave with this. Economic assistance seems likely, but we will not know with full certainty until the bill passes. So there’s a brief overview of what’s happened. The past 24 hours.

00;04;59;11 – 00;05;08;10
Dr. Hunter Biram
Were the potential potential payment rates set, and what to look forward to in the next couple of days. So with that, I’m going to set up four hours later.