House farm bill proposal gives relief

URBANA, Ill. – An analysis by a trio of University of Illinois agricultural economists indicates new farm bill legislation proposed by the U.S. House Agriculture Committee may not put all financially-stressed farms into the black, but will provide some relief.

Under the proposal, the per bushel AMTA payment for corn is boosted 4 cents to 30 cents per bushel with a corn target price of $2.78. The new soybean fixed rate would be 42 cents per bushel with a $5.86 target price for beans. The per-bushel target prices would kick in during times of low prices.

The three agricultural economists utilized data from just over 1,000 Illinois grain farms participating in the Illinois Farm Business Farm Management record-keeping and management program.

“We found that the new plan would provide an average of $12,000 to $17,000 in additional revenue on these sample farms,” said ag economist Paul Ellinger.

Hard to predict. Ellinger said the major source of new revenue in the proposal for Illinois farms comes through the counter-cyclical provisions triggered by low prices. The proposal might have some impact on cash rents and land values, though it is difficult to predict.

“With these supports for farm income, however, you are not likely to see a reduction in rents or land values,” he said.