2016 ARC-CO payments have been issued by the FSA. As shown on the map, counties in Iowa will receive a gross payment amount ranging from $0 to $85 for corn acres, and $0 to $33 for soybean acres. In the map below you can use the dropdown option to view the gross amount per base acre in each county, the 85% adjustment since it only pays on 85% of base acres, and then the final amount after the 6.8% sequestration deduction.
County-to-county and year-to-year variances can be caused by a number of factors included in program calculations. Some of these factors include the actual 2016 yield, historical county yields that influence the county specific benchmark revenue, and also the high and low yield years dropped from the 5-year Olympic average yield calculation.
Below are two examples showing the changing variables in the ARC-CO payment calculations from 2015 to 2016. The 5-year benchmark Olympic average yield is calculated by dropping the high and the low yield and calculating the average of the remaining three yields. The 5-year Olympic average price was $5.29 in 2015 and $4.79 in 2016. The national average price also fell from $3.61 in 2015 to $3.36 in 2016.
Winneshiek County had a benchmark yield of 171 in both 2015 and 2016, however their actual yield rose from 185 bu/acre in 2015 to 210 bu/acre in 2016, nearly 40 bu/acre higher than the benchmark yield for that county taking their payment from about $72 in 2015 down to $0 in 2016. Many other counties also experienced decreases from 2015 to 2016, but typically on a smaller scale.
The second example demonstrates why there have been very few ARC-CO payments in much of South Central Iowa. As shown, Monroe County had several years with very low averages including 2 plug yields (95 bu/acre) in 2015 and 1 plug yield in 2016, which resulted in a low benchmark yield. However, the actual yields for Monroe County in 2015 and 2016 were 57 and 58 bu/acre higher than the benchmark yield, resulting in no payment.
Michelle Mensing is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.