Ag Policy Blog

Since last week's announcement of the $12 billion in economic aid for farmers through the Farmer Bridge Assistance (FBA) program, there has been quite a bit of speculation on what those payments would look like.

You could open an entirely new line of prediction forecasts on Polymarket.

Under the FBA, $11 billion will go to commodity crop farmers while another $1 billion will be reserved for specialty crops.

Economists at the University of Illinois ran projections on payment rates looking at prices and yield estimates from the December World Agricultural Supply & Demand Estimates (WASDE) report, along with planted and prevent-plant acres for crops to come up with its estimates.

Given that Congress funded $10 billion in payments under the Emergency Commodity Assistance Program (ECAP), the simple path for projecting what FBA payments will looking like is to tack on 7-10% per acre to what crop farmers received under ECAP. The ECAP payments dealt with 2024 crop losses and the payment formula was largely crafted by Congress.

But that's not exactly how payments are projected to shake out. Farmers growing some crops will see significantly higher payments than producers received under ECAP while a few crops -- including soybeans -- would receive less. The farmdoc analysis noted, "This is perhaps most surprising for soybeans as it is the most often cited crop as being harmed by trade disputes."

Estimated FBA Payment Rates and percentage higher or lower than ECAP payments:

Corn: $46, 7% higher

Soybeans: $25, 16% lower

Wheat: $39, 27% higher

Cotton: $115, 36% higher

Oats: $92, 18% higher

Rice: $134, 74% higher

Peanuts: $64, 15% lower

Sorghum: $48, 13% higher

Barley: $21, less than 1% lower

Looking at farmers with a 50/50 corn-soybean rotation, farmdoc puts the average FBA payment at about $38 an acre.

USDA pressed farmers to make sure their acreage is updated with the Farm Service Agency by the end of business on Friday, Dec. 19. It's expected USDA will release the final FBA payment rates the week of Dec. 22.

The full farmdoc daily report:

https://farmdocdaily.illinois.edu/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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