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Iowa Ag Review

Abstract

I ncreased demand for corn from ethanol plants, short wheat crops, and stagnant South American soybean yields have led to $3.00 corn, $5.00 wheat, and $6.00 soybeans. These high prices suggest that producers of these commodities should not expect any loan defi ciency payments or countercyclical payments for either their 2006 or 2007 crops. If futures prices are any indication, then farmers might not see any payments from these programs for at least three or four years. High prices will not affect direct payments, of course. So $2.1 billion in annual aid will fl ow to corn farmers, $1.15 billion will go to wheat farmers, and soybean farmers will receive $608 million for both crop years despite the high prices.

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