The sign-up period for the 2019 Market Facilitation Program is now open, says Bryon Parman, North Dakota State University Extension agricultural finance specialist. The program provides aid to farmers growing specified crops in the form of a county-wide payment rate as determined by the U.S. Department of Agriculture (USDA).
The county payment rates were released at the end of July and varied from a minimum of $15 per acre to a maximum of $150 per acre. Many North Dakota counties in the southwestern part of the state will receive the minimum of $15 per acre while the eastern part of the state will have payment rates of up to $60 per acre (Lamoure County). Most of the southeastern counties will receive more than $50 per acre with the average payment rate across North Dakota being $31 per acre.
“This year’s program payments are considerably different than last year in both the weights given to each crop and how payment rates for farmers are calculated,” says Parman.
Last year, the rate was applied to actual 2018 production where a rate was chosen and multiplied by the number of head, bushels, tons or hundred weights produced and verified after harvest. It was weighted heavily towards soybeans, with soybeans getting $1.65 per bushel.
According to a report by Farm Futures, Cass County received the most money of any county in the U.S. in 2018, having $34.4 million paid out, while Richland and Stutsman counties were both in the top 10 in 2018.
This year payments are in dollars per acre and not based on the current year’s crop production. Additionally, the rates have changed, and other crops are included that were not previously.
The USDA performs four calculation steps to determine the payment rate. The steps include looking at the typical number of acres in a county of the 2019 specified crops, the yield history at the county level, and the 2019 payment rates per commodity. These calculations are then averaged across the county such that each acre of the specified crops receive the same payment rate.
“These county rates may differ dramatically, even for neighboring counties, i.e. Stutsman County receiving $51 per acre, while Kidder County will receive $29 per acre due the ratio of crop acres receiving a high payment like soybeans, to crops assigned a lower payment rate such as corn (as well as the typical yield for the specified crops),” says Parman. “A county may have more total soybean acres than the neighboring county, however, if the neighboring county has more soybean acres relative to other crops with lower payment rates, then their rate per acre could be higher.”
Additionally, crop acres with no payment rate still receive a payment, however, they lower the county average by having a $0 value attached to them.
2019 payments are set to go out in three portions with 50% of the rate being paid out in the first payment. However, counties receiving less than $30 per acre will receive at least $15 during the first round of payments.
Source: ndsu.edu