Farmers in parts of the northern and eastern Corn Belt would be collecting Price Loss Coverage payments on their corn crops this week IF the House version of the farm bill were in place.
DTN's market tracker shows corn for delivery selling as low as $3.17 a bushel in northeast Montana. Cash prices in several states show farmers would be receiving a target-price check for corn.
Currently, House and Senate negotiators are trying to come to conclusions on the commodity programs. Principal lawmakers continue to meet in private, but conferees have not announced any new public meetings on the farm bill this week.
The Price Loss Coverage program in the House bill is a renaming of the current counter-cyclical program that also increases target prices for most major commodities. Under the House bill, the target price for corn is $3.70 a bushel. That price would likely be set for the 2014 crop if the farm bill negotiators were to keep the House PLC in the final bill.
DTN's Market Tracker shows corn prices below $3.70 in parts of the eastern Corn Belt, notably throughout parts of Michigan and Ohio. Farther west, prices throughout North and South Dakota are hitting lows below $3.40 a bushel in some places with prices averaging more around $3.50 a bushel.
A few farmers in Kansas would also be collecting a small PLC payment for grain sorghum as well. The PLC target price for sorghum is $3.95 per bushel, but some elevators are reporting prices below $3.90 a bushel.
The PLC target price for soybeans is $8.40 per bushel. Prices remain at least $3 above that point throughout the DTN Market Tracker for soybean cash prices and basis.
The U.S. Senate was less supportive of target prices. Most Midwest senators on both sides of the aisle opposed keeping a target price safety net in the farm bill. However, Southern senators wanted to protect prices for rice and peanuts. The Senate came up with the Average Market Price program, or AMP. Under this program, most commodity price protections would be based on 55% of the Olympic average for that crop over the past five years. The price would also be calculated using base acres. Based on tables showing annual average prices going back to 2008, the target price for corn likely would be in the range of $2.99 to $3.08 a bushel for the 2014 crop.
Note: Reuters USDA reporter Chuck Abbott pegged the AMP target price at $2.83 a bushel for corn, using $5.15 as the Olympic average price for the calculation.
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