U.S. Farmers May Reap Subsidy Boom on Record Crops

[fjlip]

A record U.S. harvest has pushed crop prices so low that taxpayers may pay billions of dollars more to subsidize farmers than anticipated just months ago, thanks in part to changes Congress approved this year. Lawmakers passed a five-year farm law in February and hailed its projected savings in subsidies of $14 billion over a decade. The forecast was based on farmers getting paid more for their crops. Instead, prices have fallen and may trigger subsidies the law aimed to reduce. The bill, one of the few bipartisan measures Congress passed this year, could end up costing taxpayers billions of dollars more than expected after legislators bet commodity prices would stay high and states would end programs that qualified them for higher food stamp spending. A drop in crop prices, combined with subsidies added in the new bill, may more than double pay-ments in 2015 from what lawmakers anticipated, according to one estimate. Making matters worse, the government has proposed lowering a requirement to blend corn-based ethanol into gasoline, which may reduce demand for the grain. Payments to growers of corn, peanuts and other crops may reach $6.5 billion for this year’s harvest, or about $4 billion more than lawmakers anticipated in the farm bill, said Vincent Smith, director of the Agricultural Mar-keting Policy Center at Montana State University. U.S. farmers are growing more corn than ever. The USDA this month estimated a record yield of 174.2 bushels an acre. Such bumper crops may lower Deere & Co. tractor sales along with Monsanto Co. seed revenues, agricultural economists said. “If we keep producing the way we have, we will see some very low prices, and we will be in for a scary time,” said Harwood Schaffer, an economist at the Agri-cultural Policy Analysis Center at the University of Tennessee.

[bucket]

And lucky for us canadian farmers we get to use our farms equity to compete against the US treasury.

Gold star.

[bucket]

And for ritz's advisors that lurk here the US farmers subsidies have transparency to them as well. They are already calculated and before harvest is done.

Not 2 years after the fact with cdn programs.

[SASKFARMER3]

I said this would happen! And in canada we get royally f$&ked!

[SASKFARMER3]

I said this would happen! And in canada we get royally f$&ked!

[Partners]

In the U.S. they realize that the AG sector is important..Here in Canada..food is at the grocery store...

[mcfarms]

NO in the states the realize the votes in the electoral college from the farm states are important in Canada we are no longer relevant to the politicians.

[fjlip]

Oh come on guys, the all knowing Ritz with agreement with our "Premiers" gave us Growing Forward 2. A castrated Agri Stability and Agri Invest.
We have tools to" manage risk due to severe market volatility and disaster situations", all bullshit, big ambiguous feel good words! Thanks for nothing, politicians!
Copy and email the quote to all Cons MP's and Wall, ask how to compete with US treasury!
If US farmers do not suffer with lower prices they will grow even more to further depress prices!

[farmaholic]

fjlip: they had to change it, they saw the monstrous liability coming at them TEN miles away. The treasuries couldn't afford it.

The odd thing is the subsidies go to a part of the chain that distributes it to the rest of the chain. So it really is an "Industry" subsidy not just a "Producer" subsidy. When the rest of the Industry starts to feel the pinch they will throw out a few dollars for us to distribute.

In lieu of Producer subsidies we now have more funding for "Research and Innovation". We'll have to wait for the "benefits" to "trickle" down to us.

I have to laugh when people say Ag subsidies are a drain on the economy. I can't say with any degree of certainty but I've probably paid more in taxes than subsidies I've received.

[bucket]

Anyone notice what happened in cattle?

The depressed prices drove 2 generations away from the ranch. No help from government during bse etc.

Now with the recovery in prices they think the herd will grow. It will continue to shrink with older guys finally getting their payday.


Same thing will happen in grain farming. How do you encourage a kid to farm when you know the grain prices are set in the states with a farm program designed to depress prices to encourage exports while farmers are supported very well.

Meanwhile in Canada we export but are expected to use equity to survive.

Oh did I mention export prices don't change that much so the middleman is guaranteed his profit.

Monster crop in the states and still subsidized.

In 2013 Canada had monster crop, no movement, I guess everything is OK. In 2014 grade patterns all over no movement. But I get told I could wear out a semi driving past 15 elevators to be the same distance from the port to net less.

Canadian farmers can not compete against the US treasury. They set our prices but could care less what happens north of the 49th.