As discussed in a May 25, 2023, SAT article “The Silly Season Has Begun… Must Be Farm Bill Time,” every farm bill cycle, we run across a report or research geared toward “informing” farm bill discussions that, while not technically wrong, boy does it leave out something kind of important…hence the term “Silly Season.” This time the article was written by Scott Faber and Jared Hayes of the Environmental Working Group. Their September 5, 2023, article entitled “Calls to Increase Crop Reference Prices Would Help Fewer Than 6,000 Farmers” caught our attention.
The authors analyzed individual producer payment data from their database of FSA payment data obtained through Freedom of Information Act requests to arrive at the following conclusions:
“Increasing price guarantees for major crops would mostly benefit farmers of peanuts, cotton and rice in Southern states, not corn and soybean farmers, EWG has previously found, which further limits the overall benefit of increasing price guarantees.
Only 5,630 farmers, mostly located in Southern states, received more than $50,000 in 2021 through the Price Loss Coverage, or PLC, program, according to USDA data, and would get more than a few thousand dollars if price guarantees went up.”
For the most part, we have few technical issues with what they said based on what they did. However, there are a number of factors – not discussed – that make their results meaningless. First, they picked 2021, a year where most commodities in PLC did not trigger a payment. The black line in Figure 1 intersects the marketing year average price for 2021 for the top 5 commodities in terms of base acreage. All commodity prices are above their respective reference prices, so…no safety net payments would have been made. If they had picked a year or two prior to 2021, there would easily have been more than 6,000 producers receiving payments. Second, rather than try to use payment data to draw a conclusion, it would have been more meaningful to use FSA enrolled base acre data. Figure 2 provides the FSA enrolled base acres for PLC and ARC county and individual for all 23 covered commodities. While acreage data doesn’t allow one to say definitively how many farmers would be affected, it is pretty clear that in 2021 there were over 140 million acres of base in the PLC program that, depending upon prices, could have benefitted from higher reference prices. That applies to every single farmer with base acres in the United States. In fact, every farmer would receive assistance in direct proportion to the amount of acres they have at risk, except for mid-to-large-sized operations that are payment limited. However, that is not likely the headline the authors were looking for…
Figure 1. Historical and Projected Prices for Five Major Commodities, 2009 – 2023.
Figure 2. Enrolled Base Acres in PLC and ARC, 2015 to 2023.