Talk of Direct Payments to Farmers

There has been a lot of chatter and press about a bill authored by Rep Trent Kelly (R-Miss) on the House Ag Committee, the Farm act offers payment assistance to eligible farmers.  The bill is called (FARM) Farm Assistance and Revenue Mitigation) the intent is to offset financial pressure and uncertainty while the farm bill is negotiated.

This is a unique situation where a junior congressman took a shot at a formula using cost of production numbers to determine a revenue shortfall and a coinciding payment per acre.  It is unique in the fact that no grower groups, agent groups, or special interest groups were lobbying for it.  It was solely authored by him, now since then it has garnered a huge grass roots movement in popularity.  The banking industry and Farm credit systems has been hugely lobbying for this after realizing that a huge percentage of their loan portfolio has a negative cash flow.

With the extension of the farm bill and no real path to passing it in a Lame duck session I feel that that this FARM bill authored by Trent Kelly will get attached to a wider disaster bill (hurricane relief in the Gulf) and will get passed very soon.  I also have no doubt that there will be tweaks in the language, payment caps, etc. but feel confident that it will be attached and will be passed.  With that said the number floating around D.C is 20 billion for this bill.  It is too soon to know if they will sequester monies like in the past or have it paid in installments or all at once or even in what year.

I do know that FSA has been briefed on it as they must have a delivery system to dole out the monies.

In summary it is real and it most likely will be passed in some form, for now here is what the projects calculation looks like for the 8 most popular crops grown.

(USDA’s Projected Cost of the Crop – National Projected Returns) x Eligible Acres x 60% = Total Payment.

  • Corn: $103
  • Soybeans: $48
  • Wheat: $82
  • Cotton: $208
  • Rice: $74
  • Sorghum: $85
  • Oats: $181
  • Barley: $3

I have proposed an amendment to add or to amend to add for honey producers.  We have seen a 40% decrease in the price of honey since 2022.  So, my proposal is to keep it simple like the formula for crop by simply taking the amount of hives X $35 per hive.  I came up with the $35 by taking the avg price of honey over the last 5 years and using an avg of 85 lbs. of honey per hive.  Here is to hoping we can get this through!