Peanut farmers enrolled in the Price Loss Coverage (PLC) program under the 2014 farm bill now have the information to calculate payment rates and get estimates on payment amounts.
The 2014 Marketing Year Average (MYA) price for peanuts is 22 cents per pound, or $440 per ton according to the August Agricultural Prices Report from the USDA's National Agricultural Statistics Service (NASS).
UGA Extension Economist Dr. Nathan Smith reviewed the peanut coverage under PLC as part of his presentation to extension economists and other agricultural industry professionals during the Southern Outlook Conference Sept. 21-23 in Atlanta.
Using the PLC payment formula, the MYA price is subtracted from the peanut reference price of $535 per ton, leaving $95 per ton.
The final payment rate is $95 per ton times 85 percent of base acres minus Congress' mandatory reduction of 7.3 percent, resulting in a payment rate of $74.855 per ton per base acre. The peanut base is the farmer's permanent peanut base plus the generic acres assigned peanut base according to planted acres. To estimate the payment amount, multiply the payment yield in tons times $74.86. Using an example of a farmer with a yield of 3,000 pounds (1.5 tons) per acre, Smith showed how the payment calculation would arrive at $112.28 ($74.855 times 1.5) per base acre.
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